Businesses have faced multiple external influences in recent years, with Covid-19 being the most notable development. These disruptors have forced organizations to adapt; from working around the challenges faced, adjusting to new ways of working, to adapting to industry 4.0. All of these factors drive the level of complexity in organizations – strategically and operationally. Businesses not only have to proactively respond to all these complexities, they are expected to thrive while operating in a resource scarce environment. Hence, now more than ever, the PMO’s ability to effectively deliver projects and transformation of businesses of all sizes and multiple locations is essential to achieve their ambitions.
To truly drive transformation for an organization, projects need to be done at scale. A study conducted by McKinsey & Company analyzed over 5000 large-scale projects and found that 56% delivered less value than expected, 45% went over budget, and 17% were so catastrophic that they threatened the organization’s survival. This highlights the importance of taking appropriate steps to identify PMOs that have the capabilities to adapt to the future of work.
Source: McKinsey & Company – Delivering large-scale IT projects on time, on budget, and on value
Historically, PMOs are seen as lacking a clear identity or purpose within an organization, however the future-state PMO is an enabler of business value creation; partnering with business leaders to provide a clear and achievable roadmap while optimally using the organization’s limited resources.
PMOs also need to adapt to the new normal and rising expectations of businesses. The three areas outlined below show the key elements that PMOs of the present and future need to embrace in order to effectively manage transformation.
Technology & Automation
Covid-19 has accelerated the way we use technology in our daily work, hence technology is expected to be front and center, empowering PMOs to deliver more effectively. The use of sophisticated tools and cloud-based solutions will be critical going forward to effectively adapt to new ways of working and establish a ‘single source of truth’. This is essential for borderless operations where progress and transparent communication needs to be readily available and updated in real time for quick decision making.
Artificial intelligence and machine learning will be the key enablers to automating PMO processes in the future, providing better insights and enabling teams to spend less time on manual transactional processing and more time on driving value to projects. Project planning is usually reliant on the gathering data, industry benchmarks and leveraging on experience of PMs. However this remains a sizable inefficiency in project management, with around 1/3 of traditional project management operations spending 1 or more days manually collating reports. Leveraging IoT and big data can eliminate several tedious processes while arming the PMO with the ability to set more realistic and effective timelines and identify any disruptors.
Source: PMI – AI Innovators, Wellingtone – The state of project management 2020
However, it is unlikely that technology will fully replace PMs, with PMI estimating that by 2027, employers will need nearly 88 million people in project management roles. Hence the expectation will be for PMs to enhance their capabilities and leverage the full potential of the technology available.
Going forward, PMOs will be expected to lead by example through their automation initiatives, promoting new ways of working with their collaborative organization. In turn this can shift the paradigm of how to effectively deliver workstreams and drive businesses into becoming more digital.
With an increased level of complexity for transformation and multiple stakeholders to manage, projects may need to adapt and pivot into different directions compared to initially planned. If not responded to appropriately, this could result in project failure, with PMI citing that the two primary causes of project failure stem from changes in priorities (39%) and objectives (37%) and failing to adapt.
Hence PMOs that can be responsive to meet the constantly changing requirements are essential to meeting project milestones which could be the difference between being an industry leader or laggard. The key principles of an agile PMO include:
- Decentralization planning and decisions making
- Agile resource allocation and reallocation
- Effective workflows for constant project progression
An agile PMO can show adaptability by shifting priorities and reallocating resources to meet the new objectives whilst seamlessly transitioning from reorganization to continuous delivery. Additionally, decisions are decentralized, enabling higher response rates to identifying and mitigating risks. Finally, communication is fundamental, with fewer layers of approval and output is measured by what can be completed in a given sprint.
However, simply setting up an agile PMO will not be the solution to all problems, in fact 47% of agile projects are late, have budget overruns, or result in unhappy customers. To benefit from agile’s full potential you need a cultural shift, starting from the leadership team and cascading into all levels of the organization.
Hence, the PMO cannot only operate as the middle man but instead as a business partner, operating side by side with the leadership team and the rest of the business. Team members need to be self reliant, accountable and have complete visibility into project progress and data.
The role of the PMO requires evolving from a team that simply provides assurance to a strategic partner with a vested interest in aligning with the organization’s ability to deploy their strategy. As such the expectation is for the team to have more of a strategic oversight of all work streams to drive value throughout the project.
PMOs will be required to expand from task completion and monitoring to:
- Portfolio planning – idea generation of the necessary initiatives required to realize the opportunity
- Project prioritization – establishing the most effective timeline and budgeting aligned to the organizations needs
- Capacity planning – allocating the right skills and resources to each worksteam
- Resilience planning – identifying potential challenges in advance and minimizing disruptions
- Strategic partnering – a cultural shift in the relationship between management and the PMO where the PMO is looked at as a business leader and advisor with a vested interest in the organization’s objectives
Consistent stakeholder engagement is the name of the game, with the PMO and business leaders conducting frequent strategic discussions to monitor and align on business strategy and overarching strategic objectives. Together this will establish a collaborative strategic management process and a means for fluid communication to adapt quickly and effectively.
The PMO of the future will be more strategic and intricate in nature from traditional approaches with a focus on driving decision making, executing and being results driven while becoming more decentralized to effectively collaborate with each of the workstreams to reach one central goal. Ultimately PMOs will be more important than ever to tackle the complexities businesses are currently facing and effective transformation will require PMOs to be the voice and face of the organization.
Meet our Experts:
Paul Klinkhamer | Strategy Partner, Middle East
Paul Klinkhamer is the Managing Partner at Monstarlab Middle East and has 20+ years of cross-industry experience in strategy, capability building, change management, policy assessment & development, business launches & transformation, turnaround, and M&A, across the Middle East, Europe, and Asia.