Four Critical Shifts Disrupting the PMO Mandate

PMO Leaders must rethink the Project Management mandate and evolve in order to thrive in the new normal.  This is being driven by Digital Business Transformation initiatives occurring in nearly 70% of businesses in the USA. Digital Business Transformation is the aspect of “going paperless” and is disrupting whole segments of society including Public Sector, Telecommunications, Health Care, Science, and Transportation.  The positive aspect of “going paperless” is that companies are seeing increased efficiency via automation and cost savings.  A good example of this is the replacement of expensive legacy computer systems in data centers to running applications in the “cloud”.

Even though these initiatives are creating greater efficiencies, it is also creating significant changes that are directly affecting the PMO’s mandate.  The PMOs’ which are thriving in the “new normal” are adapting by refocusing on project and portfolio management activities that will become more significant.   Here are the four Shifts occurring right now that PMO Leaders must adapt too.

1.     Type of Work Structure

There is a shift from a “project-centric” PMO to a “product-centric” PMO.  Traditionally, PMO’s had been organized at the Enterprise-level and you had centralized resource management, financial sponsorship and governance.  Now, PMO’s are relying less on projects and more on product lines, value streams and portfolios. This means that the PMO’s direct ownership of delivery will decrease as it shifts to the product resources taking ownership.  You will continue to see PMOs having a critical role in managing Programs, however. 

2.     Funding Process

You are also seeing a shift from a conventional centralized process for evaluating potential projects to one that is product-line oriented with decisions being made at the product level.  In many ways, this is much more complicated than the conventional approach that PMOs take as now you are seeing a number of adaptable multimodal processes. These processes will use Value Stream as the unit of investment with the results hopefully being faster product go to market and the ability to dynamically reprioritize funding and resources within the product line.  These new funding models are causing PMO Leaders to adapt how it supports investment reviews and prioritization exercises. 

3.     Framework

Agile is now taking over as the primary delivery approach in most types of portfolios. The “Waterfall” methodology is rapidly being replaced as you see agile or other iterative methods being used for most IT development.  Just five years ago, 25% of organizations used agile for most development and in 2018, the scales tipped to over 50% of organizations using agile for IT development.  Today, that number is more than 60%.  However, the term Agile is not consistent from company to company as most organizations use some sort of hybrid-agile methodology.  What this means is that Scrum Masters and Product owners are tackling many of the “classic” project management tasks such as estimating work, tracking the project health, scope and timeline management.  These duties are not typically part of a PMO and reside within the Product and/or Development teams.  This causes the PMO to shift its emphasis from delivery ownership to enabling and coordinating others in the organization. 

4.     Governance

In the traditional mandate, PMO’s had a large presence into fewer portfolios.  However, in the New Normal, PMO’s are having lower presence into more portfolios.  As you see a product centric organization and value streams, these organizations are breaking up the conventional larger centralized portfolios into smaller sub-portfolios.  This makes it more difficult for PMO Leaders to get cross-enterprise visibility.  What this means is that PMO’s will need to change the methods it supports the owners of these portfolios, based upon each of these portfolios having different qualities. Developing an excellent working partnership with effective communication between the PMO Leaders and Product Owners is essential for ensuring success.  

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