Emerging PMO Trends to watch in 2014

December 31st, 2013 | Uncategorized

PMO 2014 Emerging TrendsIt’s always difficult to predict the future, otherwise we would all be lottery winners, so over the past months, I have been reaching out via my own network of Execs, PMO’s, Portfolio and Project Professionals and informally discussing what are the trends which seem to be appearing for PMO’s.

So here’s what’s to look forward to on some PMO things we might start to see in 2014 based on actual practitioners points of view….

 

 

 

1 – Chief Portfolio Management Office (CPMO)

Some of the practitioners I had spoken with have been involved in discussions surrounding making the PMO type function into a division responsible for all organizational change. Since 2007 the term ‘emerging PMO’ has been used, or ‘Business Driven PMO’ from Mark Price Perry in 2009, and it now seems that some organisations are starting to think they should have a directorate responsible for landing all change; moving from an Emerging PMO to the Directing PMO.

Some consultancies have also held conversations surrounding a CCO – Chief Change Officer, or a Chief Commercial Officer responsible for development and execution of the organisations strategy.

The CCO would lead the CPMO, and sit alongside the COO (Chief Operating Officer), the CFO (Chief Finance Officer) and the CIO (Chief Information Officer). This Quartet could be more effective in the execution and embedding of strategic aims within an organization, with the accountability and sponsorship for change being led from the very top of organisations.

 

2 – Move towards SaaS and Cloud Enterprise PPM Software

In May 2013 Gartner (http://www.gartner.com/technology/reprints.do?id=1-1FN5PWK&ct=130515&st=sb) published the new ‘Magic Quadrant’ for IT PPM Cloud Based services.Gartner 2013 IT PPM Magic Quadrant

 

What was surprising was the percentage of organisations ready to pilot or already piloting these solutions; could this be the start of the end for the ‘big boys’?

Organisations are constantly challenged in maintaining the value delivered from Enterprise PPM software, and avoiding it becoming an expensive time tracker, but what these new Cloud solutions are showing is the ability to purchase the software on either a rolling monthly contract or for 12 months at a time. This dramatically reduces the risk for organisations to either move to another provider, or cancel the agreement if the software no longer delivers value, and reduces expensive set up on the supporting consultancy, which is sometimes required.

Therefore, this ideally places the software to also be used on large programmes, or selection or projects; if the programme is cancelled, so is the cost of the software. On the other side, it can also be deployed immediately, and from my experience, they also tend to be easier to use and more intuitive, therefore less reliance on consultancy or training.

Another advantage of cloud based PPM software, is only paying for what you need. Over the years, the larger Enterprise PPM tools which have dominated the market, try and do everything for everyone, yet a lot of organisations only need the simple stuff like tracking a couple of milestones per project, and then aggregating the projects. These cheaper software options enable the PMO to select the tool based on what their own organisations requirements are, rather than what comes out of the box.

 

3 – Move from PM Training to PM Continuous Improvement

During my last two engagements, there has been an objective given to my team and myself for ‘knowledge transfer’.

Organisations are starting to use PMO’s as a way to embed good, best practice PPM skills and train, coach, and embed these skills.

I was also speaking to another organisation who also stated they was looking for the same, yet in the last year they had just trained up their whole team on Prince2, and expected this would give Project Managers what they needed to ensure projects improved.

Other PMO practitioners and consultants I had spoken to had also said organisations wanted to avoid the ‘launch and leave’ culture of bringing in new PPM / PMO practices from consultants and training, and ensuring the organization from Sponsors to Project Managers really understood their role, and were in a position to continually improve practices already established. As one Exec said to me ‘this way we develop our people, but my department retains the knowledge’.

This opportunity places PMO Practitioners to be the leaders in developing change capability within organisations from the top through to the bottom, rather than placing practitioners on the 1-week training course.

 

4 – Portfolio Resource and Demand Management (RDM)

For years, it has been assumed by many, that Portfolio resources are an aggregation of projects / programme resources; and a lot of the ‘off the shelf’ software drive organisations down this path.

The challenge for these organisations is that a full time employee is only effective for 85% of their time (if they are lucky), and aggregating project demand forecasts do not take into account the other 15%.

The added challenge is also around how to control the constant movement of projects and project resource demands including the ‘peaks and troughs’ in demands that take place when aggregating these individual demands into a portfolio resource view.

Portfolio RDM looks at resources of people, suppliers, materials, contractors etc as a whole, and uses strategic mix of resources and partnering alongside more traditional approaches such as employees and contractors.

 

5 – Integrated PMO models and Complex Governance

Since the first 2009 P3O manual, they have referred to this as ‘hub and spoke’. The need for PMO’s to be strategic and commercially driven, but also satisfy other business drivers such as tracking and assuring the performance of projects and programmes.

This year, I have seen many organisations continuing to move a PMO into a position where it is a permanent strategic function of the organization, whilst also creating temporary PMO’s within large programmes or bespoke divisional PMO’s within departments like I.T / HR or within other companies; basically creating PMO’s reporting into PMO’s.

After speaking to many practitioners, they are now concerned that governance will become more complex with multiple levels of governance for PMO’s to navigate around, but also the opportunities, that if it is ‘done well’, the right information can be placed with the right person, for the right decision at the right time.

Complex Governance models are starting to emerge, and could easily be the success or downfall of delivery, unless a timely calendar of meetings, submissions, and information flow is agreed by all; but like any chain, if a link is broken, albeit temporarily, the whole chain fails.

 

It’s evident that over the recent years, the PMO landscape is starting to change from support and admin, towards a function with key commercial accountability. No doubt, some organisations will be ahead of this curve, and others behind, but PMO’s are now a key part for organisations to effectively deliver change.

 

I hope the above has given you some food for thought, and wish you every success in keeping to your New Year resolutions.

My personal New Year resolutions are to eat healthier and exercise more, and my professional ones are for all projects to deliver on time, to quality and cost… ….on the other hand, someone better pass me that large slice of cake and the TV handset

 

Happy New Year

@pmoplanet

Comments

  1. Chris Walters says:

    Part 1
    Interesting, Ralf! My thoughts on these topics are:

    1 – Chief Portfolio Management Office (CPMO)

    Good to see taht this idea is getting a little traction. Bet it will be at least 10 years before it catches on widely. Alternative terms for board positions are doing the rounds: Chief Investment Officer, Chief Strategy Implementation Officer.

    My personal view is that PMO has too much of a distributed / local / tactical moniker, so I thing that a “Strategy Execution Office” might be a good strategy to distance from classic PMO. I’ve held the view for a long while that portfolio offices are best not staffed by project delivery experts – the skills are far too distant.

    Part 2
    2 – Move towards SaaS and Cloud Enterprise PPM Software

    A number of thoughts here:

    a) Surprised not to see Clarity on Demand on this, given that it’s top right of the classic EPM quadrant from the same people!

    b) A cloud EPM solution either has to be configurable or differentiated from its competition. Businesses rarely have the luxury of a complete OOTB solution as there is nearly always some localisation required. If the assertion is true (“enable the PMO to select the tool based on what their own organisations requirements are”), then I look forward to a plethora of slightly different niche solutions confusing the marketplace!

    c) Businesses will make decisions based on whether they can afford to expense (opex) EPM solutions or whether they would prefer to have an asset (capex) – company cash flow management might influence the tool purchased.

    d) With all the above, I expect to see a number of startup EPM providers come and go, while the establishment continues to make slower functional progress. Businesses will need to factor in the stability of their provider into their solution risk assessments – would you want to put all your investment decisioning and execution capability into the riskier environment of a startup?

    Part 3
    3 – Move from PM Training to PM Continuous Improvement

    Critical to this is the Community of Practise whether formally through a Centre of Excellence, or by informal networking. The right PMO can do this well. The wrong PMO can make a real mess of it!

    Part 4
    4 – Portfolio Resource and Demand Management (RDM)

    Centralised vs distributed resource planning… maybe we’ll never get a solution that is both optimised and sufficiently flexible to support the business. Compromise solutions seem to do neither sufficiently well, and the extremes are unworkable in my experience. If only we could resource to be anywhere near 85% effective…. current focus on excessive collaboration is killing the ability to actually generate output, and don’t get me started on open-plan office spaces for knowledge workers!

    Part 5
    5 – Integrated PMO models and Complex Governance

    Governance can be relatively simple – in its purest form a project needs to be prioritised (a form of governance) for funding allocation, and then it needs to be governed through the lifecycle, including a possible revisit for further funding.

    Where companies get really screwed up is when their corporate governance and finance processes create monster projects that have to cross many decision-making jursdictions. At that point, the project becomes bound up in red tape and throttled by the very company that wants it to succeed.

    I feel that this is probably the biggest barrier to speedy time-to-market for large companies. Organisational Project Management (OPM) is a knowledge area set to go huge in the next 5 years. And if big companies can’t get this right, they will die while they compete against startups and other leveragers.

    Concluding
    Very thought-provoking – thanks for posting this Ralf (now put that cake away and go for a run!)

  2. Lance Runyard says:

    Ralf,

    Interesting read, selecting one of your points, complex governance, needs to be faster and integrated into the corporate governance when dealing with SaaS, IaaS, PaaS solutions. Gone are the days of ‘heavy requirements documents’ we have CxO making decisions at Boards and wanting SaaS products/service up and working within days/weeks. The old governance processes and approval points are no longer fit for purpose. Suspect many PMOs will be facing these challenges.

  3. […] Emerging PMO Trends to watch in 2014 http://t.co/HSNLd3pSbE #pmot #pmo #project #pmchat #pmi  […]

  4. Rune Kongshaug says:

    I read this post in January, and yes I see this comming – slowly but surley. Thanks!

  5. […] Ralf Finchett predicted that resource management at the portfolio level would become a critical function. Portfolio resource and demand management takes into account that although a resource may be allocated to your project full time, they actually are only available for work and effective around 85% of the time. […]

  6. […] Ralf Finchett predicted that resource management at the portfolio level would become a critical function. Portfolio resource and demand management takes into account that although a resource may be allocated to your project full time, they actually are only available for work and effective around 85% of the time. […]

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