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April 8, 2011
Execut i ve S u mmary
As the economy continues to recover, firms are looking at how to prepare for growth while maintaining
a lean approach. Because of this, project management offices (PMOs) are continually evolving
responsibility and focus to prepare for expanding demand and stay relevant. Todays PMOs are moving
away from traditional organizations that emphasize a rigid academic approach and toward moreflexible approaches that adapt to changing delivery models. Todays office takes a more strategic, more
bare bones approach. With executive support, the new PMO strips away inessentials and takes a less
hierarchical approach to projects, embracing communities of practice (CoPs) to develop pragmatic
methods that are consistent, measurable, and effective.
ta bl e of Co n te nts
2 Its Time To Get Your Act Together
Executives See PMO Maturity As A Business
Differentiator
4 Adaptability Is The Hallmark Of Todays PMOs
One Size Does Not Fit All
The Ivory Tower Is Dead
7 The Road Ahead: Opening The Door To Total
Transparency
PMOs Must Keep One Eye On The Portfolio
While Getting The Job Done
Are You Ready To Transform Your PMO?
N OT E S & RE S O U RC E S
Forrester interviewed PMO leaders from 12
companies.
recommendations
2011 Forrester Research, Inc. All rights reserved. Forrester, Forrester Wave, RoleView, Technographics, TechRankings, and Total Economic
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Less-mature PMOs fight battles on many fronts. From project prioritization to value
realization, low-maturity PMOs juggle many responsibilities. At this level, PMOs tend to
be within a single organization (usually IT); therefore, education is critical, but so is action.
The main challenge is establishing a support network among project stakeholders to create
consistency in project-related practices in order to gain credibility with skeptical business
partners used to political maneuvering over value-driven planning.
IT understands the need, but managers are resistant to change. Our business partners arent
really our customers yet[; its] a maturity issue. Our CIO is relatively new and wants to drive
accountability. Our goal is to have a common understanding of project management and a
common knowledge in how to [plan and deliver]. Our project managers are hungry for this,
but management is still a bit resistant. (PMO director, global energy company)
Moderately mature PMOs have created the baseline; now they need to spread the word. Project
organizations that have achieved moderate maturity have fought hard to establish consistent
practices, and on a tactical level, they have created repeatable execution practices for larger, morevisible projects. Momentum for these PMOs is critical, and in order to sustain it, they must move
from a singular focus to a cross-organizational one. Execution priorities include gaining more
reliability in reporting and extending prioritization for high- and lower-visibility projects to
achieve greater portfolio visibility, which helps transform the practices into an organic part of the
process and makes value realization measuring portfolio performance more consistent.
April 8, 2011
Weve learned that you cant shoot from the hip anymore. For us, project management has
come to the forefront of business. [The PMO] has trained VPs how to be project sponsors.
Were showing them that project management expertise doesnt slow things down. Were
showing them that you can get more done by working on fewer projects with greater
deliberation[;] youll get more done than [by] continually changing direction. (PMO leader,
North American healthcare company)
Very mature PMOs drive standards to encourage efficiency, not bureaucracy. The most-
mature PMOs focus on how companies need to execute as a whole. Multiple PMOs are the
norm to drive consistency throughout the organization. Federated or latticed approaches enable
the enterprise project management office (EPMO) to focus on optimization practices while
still maintaining an advisory relationship with the business units it supports. Strategy drives
investment in innovation as well as techniques for managing maintenance and operations
activities. PMO involvement in these mature organizations emphasizes optimizing project
management practices and extending them to cover nontraditional project tracking to provide
realistic views of resource capacity as well as continued portfolio alignment. These mature
organizations establish fully supported governance, metrics, and portfolio standards.
We are seeing an increase in productivity because the PMO is making huge strides to
remove redundancies and duplicative activities and locate them in a single place. Now that
we are driving consistency and see a standard process for reporting, [its] improving project
productivity. (Managing director, global program management office, global financial
services company)
April 8, 2011
Figure 1 Executives Recognize That Mature PMOs Are Critical To Sustained Success
Mature PMO
Integrated portfolio/
program/project
Moderately maturity PMO management
More work is projectized.
Prioritizes high-visibility
The methodology is flexible, with
projects
an emphasis on frameworks.
Some alignment with
Standard measures for
portfolio
performance and value
Improving project
are in place.
performance
Lower-maturity PMO
Resource planning begins. A resource management
standard is in place.
Prioritization challenges Higher-visibility projects
A
communities of practice
Projects are not always
are measured for
standard is in place.
aligned with strategy.
performance.
A suite of tools is in place.
Inconsistent project
Teams are incented to
performance
optimize performance.
Unable to measure
project value postimplementation
Source: Forrester Research, Inc.
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Tactical PMOs target the basics. Projects are the most-visible work initiatives, and they
often carry the most risk and benefit. Tactical PMOs focus on getting the job done for the
processes supporting project delivery by integrating the project management methodology with
April 8, 2011
project-specific activities such as development and deployment. Tactical PMOs primary goal
is consistency and as these PMOs maturity level tends to be lower, establishing pragmatic
project governance is crucial to achieving that objective. Tool use is another tactical focus
for these PMOs; while project portfolio management (PPM) tools may be evident, most
organizations rely on Excel or SharePoint to communicate project information.
The tactical PMO is organizationally static: It has clearly defined role responsibilities and
manages the traditional activities of best practices development, project reporting, and
administration. Tactical PMOs typically support a single area, such as IT. Hands-on commandand-control project management is becoming more prevalent, with about half of PMOs having
project managers as direct reports.1
Strategic PMOs look at the big picture. Strategic PMOs dont abandon tactical PMOs
Transformational PMOs take it to the next level. Transformational PMOs fully integrate into
the companys project planning and delivery. The EPMO transforms from an enterprise project
management office into an enterprise program management office because its emphasis shifts
from separate, distinct project planning to holistic, integrated initiative planning and execution.2
Organizations with transformational PMOs integrate methodologies, metrics, and tool usage,
recognizing that business and IT must work together to deliver effectively. CoPs are imperative
at this level, because while the PMO places great emphasis on standardization, the community
must recognize and refine individual practices to enable extended support from stakeholders
and to continuously drive project management as a professional role and as a stakeholder in
business success.
Maturity and cultural attitudes play a role in determining a PMOs location and style. Though most
organizations have various flavors of PMOs, mature, forward-thinking companies are consistently
adopting a transformational view of project and program management.
April 8, 2011
Tactical PMO
Project
Strategic PMO
Portfolio
Transformational PMO
Strategic planning
Value-driven delivery
Methodology
Project only
Portfolio
Project framework
Some life-cycle
management
Enterprise portfolios
Adaptable project management
Life-cycle management
Emphasizes
Tools
Governance
Reporting
Some hands-on project
management
Tools
Governance
Reporting
Hands-on program or
corporate project
management
Some tools
Governance
Reporting
Project management
professionalism
Compliance
Risk
Management
style
Size
Static
Static
Adaptable
Organizational
structure
Reports to director of
IT/LOB
Reports to VP or C-level
executives
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Transform PMO structures to fit company culture and delivery style. Organizational
structures play a large role in determining project delivery styles. Highly centralized or
federated organizations benefit from a strong centralized EPMO, while decentralized companies
may take a decentralized or latticed approach to their PMOs.3 Labels are not important;
sustained practices are an organic part of the companys delivery methods. Successful
organizations analyze what works and make it standard.
Eight months ago we disbanded our central PMO and placed [it] within the individual
brands. We blended project management in with the business. My job is to build knowhow worldwide how to run projects the right way. Weve built communities of practice,
training, and mentoring. Everything is voluntary, and everyone is excited by that. (Global
PMO director, food industry)
April 8, 2011
Integrate best practices from the ground up. Todays PMOs are not relying only on training
as a way to drive project management best practices into their organizations; mentoring and
communities of practice (CoPs) are increasingly finding their way into companies as a way to
foster greater visibility and executive support for PMOs. Participation ranges from voluntary to
a required part of management development. PMOs using CoPs as a training mechanism find
that the approach brings additional benefits, including visible executive support.
We bring our PMO managers together for two hours every month as part of the forum
and governing body its part of the job description, and they are chartered as part of the
council. We have a multiyear agenda that focuses on governance, capabilities reporting,
and tools. We have project managers on task[s that] force [them] to build [continuous
improvement]. We measure it closely and make it part of their career path. (Global director
program management office, financial services industry)
holistic approach to portfolio and project management continue to tear down the walls
between technology and business execution. To these organizations, business direction, key
applications, and technology initiatives are of equal importance to overall success. They take
a transformational approach to project management working to understand the specific
requirements of different projects while holding them to equal standards and requirements
for accomplishment. Whether a projects goal is constructing a branch office or delivering
customer-facing web applications, it must use proven methods to achieve success.
Were focused on getting faster and more effective. We have a global EPMO that provides
standards to every PMO, but were a hybrid model. We have program managers that focus
on cross-functional programs that affect the company, but then we leverage CoPs to drive
out the standards. We are not going to manage every project, but were giving everyone
the processes and tools they need to be successful. (Global EPMO director, international
beverage company)
April 8, 2011
PMOs Must Keep One Eye On The Portfolio While Getting The Job Done
Taking a holistic approach supports stronger linkage between the project portfolio and the overall IT
portfolio.4 As PMOs continue to build out stronger delivery processes, they must ensure that while
focusing on an organizations new initiatives, they dont lose sight of how all IT work affects the
project portfolio (see Figure 3).
To do this, a PMO must:
organizations are quickly learning that when taking a portfolio approach to managing areas
other than projects namely, application and service portfolios they must broaden
visibility because of the impact this approach will have on shared groups of resources. PMO
disciplines lend a natural hand to organizations building out the sourcing process. The PMO
helps consolidate demand, allowing the owners of ITs various portfolios to see the resource
impacts across the board.5 Prioritization is a tougher process but is equally critical in helping the
organization drive a consistent method of selecting the right projects at the right time. Using
scorecards and other best practices, PMOs become stewards of the prioritization process.6
We needed to have a central portfolio to see the projects and to manage change caused
by new projects. Our project portfolio consists mostly of new projects and business
change; however, if its a big enough maintenance project such as an upgrade to PeopleSoft
or [salesforce.com], its a project. That way we can control the impact of demand on the
portfolio. We are constantly discussing prioritization. Everyone thinks their [project] is
most important. Weve become the de facto prioritization group because we manage how
resources are allocated. (PMO director, global energy group)
PMOs must continuously justify their value to garner sustained support for the structure and
the processes needed to do project planning and delivery. By selecting the appropriate goals
and publishing them, the PMO can demonstrate that the organization is reaching portfolio
objectives or that it is at risk due to poor support. PMOs should focus on issues such as change,
project cost, and value all common and important metrics.
We manage change; we help everyone become more focused on building a better
foundation for systems and projects. Its helped us establish better architecture, better
security levels, and better applications. Were still going through growing pains, but were
moving in a positive direction. We publish this in our portfolio, and weve seen quality
improvements. (Director of the EPMO, US state government)
April 8, 2011
ePMO
LOB PMO
I T PMO
Project
portfolio
Project
portfolio
Portfolio
Maintenance
Project
portfolio
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Services
Operational
projects
Find a champion to support necessary changes. PMOs buried in the organization face too
many barriers to drive real change they lack the authority and visibility to work beyond a
narrow frame of reference. PMOs that have been able to bring change report directly into senior
management. The most-successful PMO leaders we interviewed report to C-level executives
with a program or project management background. Others are able to work closely with a
senior executive who sees value in a holistic approach to project management that is closely
tied to the portfolio. This support gives the PMO authority to enforce changes as well as
accountability for supporting practices that drive company success.
Create a clear career path for project managers. All but one of the individuals we interviewed
worked at a company that had established or was in the process of establishing a clear career
path that formalized the project management career. Formal training and career development
with a visible growth path attracts excellence to the PMO and builds credibility with business
leaders and management.
April 8, 2011
10
Establish communities of practice now. Formal training is important, but to foster the
project management mindset, project managers and stakeholders have to have a sense of
ownership and a say in how the firm manages projects. Professional frameworks such as the
Project Management Body of Knowledge (PMBOK) and PRINCE2 provide guidance, but realworld experience and team-driven problem solving provide greater support in driving sustained
growth. When everyone has a sense of ownership, said one PMO director, people stop
looking for a way around the system.
Gain consensus on the metrics that matter, and apply them often. Traditional measures such
as cost and schedule will always be part of the process, but transformational PMOs also look to
quality measures such as reduced rework, resource allocation levels, and customer satisfaction
as ways to demonstrate the PMOs effectiveness. Practices such as polling key stakeholders to
find out whats important to them and coaching project managers to set metrics at the start of
each project enable the PMO to get a realistic view of portfolio and project progress as well as
how effectively the process is working.
Realize that tools are necessary, and work to find the right ones for the organization. Its
critical to drive standards and consistency, and finding a tool set that helps instead of hinders
the process enables the PMO to guide changes faster than it could without tools. PMO leaders
realize that PPM tools enable them to roll out reporting and project standards; once these
capabilities are in place, PMO leaders can allow project managers more flexibility at the
individual project planning level, as long as they use the standardized reporting, resource, and
cost management activities.
Show value quickly to make sustained changes. All of the PMO leaders we interviewed had
held their position for less than four years, and most less than two. Each leader knew that
the PMO had to demonstrate real but incremental value within the first six months to retain
executive support. To do this, the PMOs focused on specifics first such as starting in a
single organization or with particular portfolios and then broadened changes as project
management became a systemic part of the company. One PMO leader from a global energy
company noted that the PMO started with the IT department; about a year later, when it
became clear that IT was the only operating group that could demonstrate success, business
leaders started asking for PMO help to build their project management practices.
April 8, 2011
R e c omme n dat i o n s
Start with a project plan. Realize that this is a project in itself. Many of the PMO leaders we
interviewed stated that their transformation was a planned project with clear objectives
and deliverables. Without this guidance, PMOs will quickly run off track. Drink your own
champagne, and make it a successful project.
Get a champion. While you cant pick your boss, its important to realize that buried PMOs
dont work and they dont last long. Approach business executives to find out what they
expect and understand about project management in their organizations. Show them the
impact of resource management and inconsistent practices, followed by your improvement
plan. Get their feedback about what works and what doesnt, and use that in your
transformation plans.
Invest in a pragmatic PPM solution. Successful project and portfolio reporting relies
on accurate data, and that means that there must be a central location for all project
information. PPM tools support standardizing practices and reporting use them
for managing resources and planned work. While its important to load current project
information, think about the long run to make sure youre not continually retrofitting the tool
as you mature. Phase the implementation by focusing first on the critical aspects: projects,
resources, and portfolios.
Endnotes
1
According to The State of the PMO 2010 report issued by PM Solutions, approximately 50% of the surveyed
PMOs have project managers as a direct report. Source: The State of the PMO 2010, PM Solutions (http://
www.pmsolutions.com/collateral/research/State%20of%20the%20PMO%202010%20Research%20Report.
pdf).
You can support achieving a holistic planning approach to delivery by adopting program management
practices that provide visibility into the impact of cross-project planning on achieving business and
technology objectives. See the December 31, 2009, Leverage PMO Skills To Build Program Management
Competency report.
April 8, 2011
11
12
The advent of the latticed PMO enables organizations to share best practices without the danger of
incurring bureaucracy. See the April 9, 2010, The Next-Generation PMO: The Latticed Model Enhances
Enterprise IT Visibility report.
As organizations increasingly call IT to show its alignment to business objectives, the project portfolio plays
an important role in demonstrating how new initiatives fit into the IT portfolio. See the December 9, 2010,
Forresters Best Practices Framework For BT Portfolio Management Leadership Maturity report.
Consolidated demand and prioritization processes can help an organization optimize all its portfolios.
See the January 14, 2009, Four Steps To Optimize Your Application And Project Portfolios In Volatile
Economic Times report.
Project prioritization is difficult, but creating a consistent practice and using it across the business groups
requesting projects can simplify it. See the July 25, 2008, Whos On First A Simple Model For Project
Prioritization report.
April 8, 2011
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Email: forrester@forrester.com
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