Digitization is dramatically changing the nature, ownership and stakeholders of IT's strategy, governance and management activities. In response, the project management office, or PMO, must shift its focus from governing and delivering projects to supporting digital transformation.
CEB, now Gartner, research reveals that digitization is a priority for 87% of organizations. Moreover, 77% of an executive's top priorities are currently dependent on technology. This focus on digitization is dramatically changing the nature, ownership and stakeholders of IT strategy, governance and management activities.
As a result, PMOs are facing significant pressure to transform. The project, program and portfolio management processes they create and oversee have been designed for predictability and consistency, not the speed and flexibility required to meet digital demand.
Project management office staff members typically operate within rigidly defined roles and a hierarchical career path. These hierarchies and rigid PMO roles are frustrated by the more fluid role boundaries and increasing ownership of project management activities by business partners and other delivery staff. Indeed, the PMO is also often an afterthought in conversations about digitally driven changes to the IT operating model, with the result being the future role of the PMO (or lack of one) in digitization projects is defined for it, not by it.
Traditional role of the PMO: Three advantages
In response, organizations are redefining the role of the PMO to more effectively support the enterprise's digital ambitions. To do so, they must look critically at potential activities through the lens of the PMO's comparative advantages. Most PMOs have three major advantages that are either inherent given the PMO's role or location, or have been developed through past experience:
1. A neutral enterprise perspective: The PMO's impartial, enterprise-wide perspective on demand, investment and the utilization of resources is a hugely valuable trait, as capital allocation and portfolio prioritization approaches change to enable the funding flexibility necessary for digital work.
2. The ability to operate via influence: Effecting change through influence and by enabling others, rather than through direct ownership, becomes even more critical as organizational boundaries become more fluid and who "owns" project management is less certain.
3. Stakeholder insight: As digitization moves into every part of the business and makes up an increasing proportion of work, there are more first-time stakeholders and greater stakeholder complexity for each piece of work. Insight on the preferences of these diverse stakeholders and experience synthesizing their feedback becomes crucial in delivering outcomes from digital work.
The new role of the PMO: Supporting digital ambitions
Leading PMOs are capitalizing on these advantages to shift the emphasis of their mandate away from governance and delivery activities, and assuming a posture of strategy over governance as well as management over operations. Here are three ways to reshape the role of the PMO in the digital era:
1. Orchestrating delivery and team workflows: With its enterprise perspective and stakeholder insight, the PMO is ideally suited to design and facilitate interactions among increasingly diverse types of work and stakeholders. PMOs can play critical roles in promoting the adoption of new delivery practices (e.g., Agile, DevOps) and will need to design the mechanisms for coordination between teams working with different methodologies. This involves spotting and managing interdependencies that can derail ongoing work and reducing the amount of effort required for interaction between teams, other governance functions and third parties.
2. Developing and enabling digital talent: Beyond working to adapt career paths and equip project management staff with the skills and techniques necessary to manage more dynamic digital work, PMOs have greater roles to play in developing and enabling digital talent. This includes fostering new capabilities such as product ownership, nurturing an extended community of project management practitioners and providing targeted support for a growing number of business-managed projects.
3. Supporting digital transformation: Digitization is driving change in the IT operating model, with 52% of IT organizations either already using or in the process of adopting a new model based around product lines. A critical role of the PMO going forward is to facilitate this shift. In addition to managing the organizational change necessary as IT makes the transition to product lines, the PMO can help support enterprise-level capital allocation, the creation and maintenance of product line investment roadmaps, and the measurement of product line performance. Beyond IT, the PMO will be called on to support the delivery of enterprise digital programs.
How to shift focus
Unfortunately, the current mandate of most PMOs acts to slow its adoption of these three roles. Sixty-four percent of PMOs currently have governance and delivery-centric mandates. These allow them to focus on having direct oversight of project execution, the definition and enforcement of compliance with methodology, planning and allocation of resources and project health tracking. So, how can these PMOs find the capacity to better support digital transformation?
With the rise of Agile, some governance and delivery activities such as detailed project scheduling and planning become less important, while others will increasingly be handled by part-time project managers who reside in business lines or functions, or by scrum masters for Agile work. But these organic shifts alone won't free up enough PMO capacity. Leading PMOs are systematically exploring ways to reduce the amount of time and effort they spend on operational and governance activities. They are flexing the level of process rigor and governance to adapt to the business context and are using process automation to reduce the burden of more administrative project management activities such as reporting and meeting scheduling. They are also delegating more activities, like risk assessment, by creating self-service options that make best practices and governance easy to access and adopt for distributed full- and part-time project management staff.
As the pace of digitization increases, the existing role of the PMO will come under increasing pressure. PMO leaders will need to capitalize on their unique advantages to proactively shift their focus from governance and delivery support to strategy and management activities that promote the enterprise's digital efforts.
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