PMO - ITM Platform | Projects Programs Portfolio

Corporate PMO = EPMO

Corporate PMOs are also generally known as Enterprise PMOs or EPMOs. The term has been strengthened over time because it is understood that there are features common to all corporations, regardless of the nature of their products and services, which directly affect the challenges and attributions that the project office should assume.

An EPMO reports directly to one of the highest executives in the organization. Very often, there are other PMOs of lower rank, for example for the coordination of programs or a business unit; but none has the global reach of EPMO.

It has often been said that EPMOs are the most important instrument to ensure that the corporate strategy is truly executed in all areas of the organization. The EPMO would be, then, a catalyst, an engine oriented to promote the constant transformation in an environment whose natural inertia would lead, otherwise, to immobility.

Deploy your corporate PMO with ITM Platform. Request a personalized demonstration.

Responsibilities: start by deciding just initiatives

Every action has associated an opportunity cost. Even when it is clear what is being done, it is clear that many other possible actions are being discarded.

When, in addition, you work in a huge organization, the lack of alignment of the departments to the corporate strategy results in a very voluminous waste of energy.

For that reason, the EPMO approach is twofold:

make sure that the right initiatives are started (doing the right things)
make sure that they are managed properly (doing things right)

It is, therefore, a constant monitoring of the strategic alignment for all the work planned and underway.

Other responsibilities include, of course, traditional areas of the PMOs, such as training and counseling (of the other PMOs); value management, which is easy to lose sight of in highly complex environments; resource planning; Demand management or coordination among PMOs.

You can discover more in the White Paper: Project-Based Management (PBM)

Benefits of an EPMO

The benefits of an EPMO are similar to that of a smaller PMO, but with strategic orientation. The big difference is that the EPMO has the necessary governance structures to navigate and master the bureaucratic complexity and processes that can often become the biggest enemy of change in a corporate organization (from 5,000 employees).

In any case, it is worth reviewing those benefits:

Increase in the number of projects delivered on time and in time
Better strategic alignment between projects and business objectives
Greater support for departmental projects, and with this, greater chances of success for the project, which can gather the required support at critical moments
Less overlap of work between department
Greater interdepartmental collaboration
Greater visibility of corporate initiatives
Higher ROI for the projects implemented, especially in non-financial terms
More efficient delivery of projects –and faster to put new products and services on the market
A better structured approach to the treatment of risks, including risk mitigation

Success factors of an EPMO

Organic location, immediately below the General Management
Change management according to good practices, so that the new EPMO is not perceived as a rival of the existing PMOs and projects managers
Complementation of the managerial function: support in the decision-making, without robbing autonomy or generating political problems
Autonomy with respect to functional areas, so that it does not depend on IT, Financial, Human Resources, etc.
All subordinated PMOs must report, either directly or indirectly, to the EPMO. Otherwise, pockets of information are created that do not flow
The competence profile should combine project management with the business vision: those who are part of the EPMO will advise managers in making critical decisions and train project managers to continue advancing as professionals
No EPMO can work reasonably well if a high degree of standardization is not achieved.

References:

Receive the latest blogs directly into your inbox

An IT PMO has control over all the IT projects of an organization. Its focus, therefore, is oriented to everything related to technological architecture, development, and systems.

In addition, it also necessarily focuses on ongoing activities and internal services, not just on projects. The clearest example is the maintenance and operations related to technical services that support the work of the organization. The projects that result from this maintenance are the constant improvements that must be made so that the systems are up to the demands of the users.

In that way, although the responsibilities are similar, the focus of an IT PMO changes, being protected from the CIO initiatives.

Technology selection
Calendar marked by IT (development, operations, and architecture)
Definition of architecture
Technology design
Building technological solutions: hardware selection, development, system integration, testing

To support the work of an IT PMO, it is essential to have a simple, robust and easy-to-use PPM tool, such as ITM Platform.

Boost your IT PMO with ITM Platform. Start free for 14 days

Why does a CIO want an IT PMO?

The IT PMO is an independent department that deals with technical and non-political criteria, able to coordinate work and manage the relationship with customers.

In highly technological environments, one of the advantages of a PMO is that it is responsible for facilitating the human aspect, serving as internal diplomats that facilitate understanding among engineers, whose arguments are not up to everyone, the management layers, and the external customers. In this “diplomacy” are integrated responsibilities as strong as the management of calendars and expectations, the prioritization of efforts or the creation of a rational framework for the delivery of projects.

On the other hand, for the CIO, the IT PMO becomes a fundamental instrument for the management of complexity. Through its mission of control, the IT PMO centralizes information, digests it and offers it in formats that make it as easy as possible to make business decisions aimed at making the services of the corporation as efficient as possible.

Some differences with a business PMO

While a business PMO tends to control only projects of strategic importance, usually grouped into programs, the IT PMO has as one of its fundamental missions to control the demand, filter it and prioritize it. For this reason, all work that can be managed as a project belongs to it –it does not matter if it is only a small adjustment or a minor impact: if it belongs to IT, it will be controlled by the IT PMO.

The reason is that there may be hundreds or even thousands of projects of these dimensions, which means that this must also be prioritized.

Receive the latest blogs directly into your inbox

Project based management is a widely spread practice in the business world because of its effectiveness in generating competitive advantages. However, it cannot be effective without the support of a strategic project management office (PMO) that actively helps define corporate strategy.

Unfortunately, project management is not applicable in the same way in every organization because companies do not all share the same processes, functions or need for oversight (what we call "maturity" in project management).

Take your PMO to the next level of maturity with ITM Platform, try for free now.

For this reason, we distinguish between different levels of maturity according to the workings of the project office, from the most basic to the true strategic PMO:

Low maturity of a strategic PMO: Inventory and control

In corporate environments it is essential to make an inventory of all the initiatives that are under way. That is the mission of a PMO of low maturity: to gather and consolidate information about all the projects and other relevant activities to report where resources are being invested.

Medium maturity of a strategic PMO: coordination

The next step for a PMO is to have the ability to forecast problems and, consequently, to tackle them. This function is common when the PMO coordinates the resource allocation. For example, during periods when there is a high volume of work, it is the PMO that should be aware that projects are accumulating and identify bottlenecks.

A PMO of medium maturity aims to improve the efficiency of the organization, recognizing possible conflicts in the planning process and proposing solutions.

High maturity of a strategic PMO: strategy and business

The highest maturity of a PMO is achieved through a fit with the corporate structure that makes it the right hand of the Board of Directors. This fit implies a governance model where strict methodologies are followed while the most important practical decisions are taken, precisely, based on the information that the PMO offers.

In these cases, the project office becomes a key element for the corporate strategy to become a reality.

Strategic questions for a high maturity PMO

A strategic PMO should be considered as an internal service that offers practical information, answering questions like:

What is the status of the project portfolio?
Are resources scarce? Does this shortage affect cashflow?
Are we executing projects that are no longer worthwhile?
Which proposals or ideas will improve the current portfolio?
What kind of new processes can be implemented as a result of the experience acquired from past projects?

However, this approach does not allow a PMO to fully develop its potential. Strategic PMOs have a proactive spirit: they collaborate with the management in strategy development and manage all project-based work.

While PMOs should be empowered, at the same time they should leave the most important decisions to management. For example, if a protocol is put in place requiring the cancelation of projects with a budget greater than a certain amount (for example, € 500,000), it makes sense to warn directors beforehand allowing them to authorize or indeed veto the final decision.

Receive the latest blogs directly into your inbox

The 9th area of knowledge of the PMBOK Guide (Project Management Body of Knowledge) is focused on the Management of project acquisitions, or in other words, the relationship of an organization with its suppliers.

Good relations with suppliers are essential to gain competitive advantage, considering that good procurement will allow us to improve margins and provide alternative strategies to position the organization in the market.

Manage your suppliers and all the purchases of your project with ITM Platform

The Project Management Director should participate in the procurement process of the plan, which implies an active collaboration with the procurement department for the planning and management of purchases. As we cannot directly manage the activities of suppliers, it is very important to control the terms of the purchases so that the project execution is not delayed.

This area is one of the most sensitive from the ethical point of view, since there may collusion by suppliers or undeclared conflicts of interest between the project director and the service provider.

Phases of Project Procurement Management

1. Specification

The actors involved in this phase are the procurement department and the project manager. This phase consists of developing and approving a list of the products or resources to be acquired for the project execution.

2. Selection

After the specification phase, the procurement department will have to find the best suppliers, according to the specifications agreed with the project manager.

At this point, it is important to establish the key criteria for the selection of suppliers, like delivery terms, quality of service, cost or offered performance.

3. Contracting

Once potential providers are selected, the procurement department will negotiate delivery terms and payment conditions with the collaborating companies. It is very important that the acquired resources or items be delivered in a timely manner to avoid delays that may affect the execution of the plan.

All the agreed conditions must be included in the budget and in the purchase contract.

4. Control and supervision

The supervision of the purchasing process will ensure a smooth development of the project but we must also have in place the necessary measures to guarantee that any purchase made adjusts to the agreed quality.

Regular meeting and fluid communication between the procurement department and the supplier are important to avoid setbacks and confusion, or to make possible changes that are considered appropriate and necessary.

5. Measure the results

The final step of the procurement process refers, precisely, to the use of a system of performance indicators that allow us to evaluate the effectiveness and success of the entire process.

The evaluation should aim to discard those suppliers that have not complied with the agreed conditions, while positively evaluating those that are a guarantee of success. The formalization of the impressions of the purchasing team and other interested parties is an important element of this phase.

The reports will be fundamental for the execution of future projects because it will enable us to learn from errors, obstacles or difficulties that we have encountered in the way.

The project manager will be responsible for establishing a system to measure results while the procurement department will be the responsible for taking the measurement. Special meetings and workshops will be a great help to analyze KPIs, buyers’ performance, adherence to product specifications and communication with suppliers. In the event of a deviation, the procurement team will have to communicate it to the project manager so that he may apply the necessary changes to the acquisition plan.

Project Acquisition Plan

The Project Acquisition Plan guides the entire procurement process. It is a tool that will help organize and manage the activities or tasks related to the process. The purchasing team will prepare the plan and the director will approve it before carrying out any operation with the suppliers.

In the Procurement Plan, we will include documents on the whole process, such as Agreement templates or contracts, estimated deadlines and the inspection of purchases, ways of contracting, financing model, quality standards, and risk management.

Receive the latest blogs directly into your inbox

The methodology is well designed, the managers agree on the need to have reliable information on projects to make decisions and the entire corporate structure is ready to embark on portfolio management. But within a few months, it becomes clear that employees who should feed the system with data about their work are not fulfilling their obligations.

This has been a problem for hundreds of large and medium-sized companies, but luckily there are many tactics to deal with the problem of internal resistance.

In this article, we present a summary of our PMO guide on how to encourage the adoption of a PPM tool.

Try ITM Platform and discover how simple Software adoption can be

Advantages of PPM tools

PPM (Project Portfolio Management) software, responds to a basic need in any corporate environment: the coordination, monitoring and control of all projects to obtain the best possible use of the limited resources available.

A PPM tool can be used to support projects of any kind, for Innovation, IT, Operations, but also for strategy, marketing, or sales, as well as cross-organizational and transformation projects.

In all cases, PPM software will offer many benefits to your business:

A single place for collaborative work between departments and teams
Aggregate information for decision making
Reduction of non-strategic projects
Speed up project delivery times
Save time spent on administrative work

Challenges in adopting PPM software

Unfortunately, this process won’t be without challenges. Like other software, it relies on the data fed into the system. If this isn’t done correctly, the effectiveness of the software will be compromised.

This affects almost all corporate software, not just PPM tools: Imagine a CRM without customer data. Or an ERP without invoices.

Despite the difficulties, PPM software is vital to compete against the best because it provides an unbiased and clear view of the status of the whole project portfolio.

That’s why you will need to manage two fundamental elements when embarking on the transition:

A framework to manage the projects portfolio that is well integrated into the design of the organization
An adoption plan that anticipates employee reactions to channel them in a positive direction

The adoption plan must also consider how non-technical components affect the resistance to change. For example: in some cases, resistance is due to objective problems in daily operations. In that scenario, it is important to listen to the objections and address them.

On other occasions, the resistance is political in nature or due to friction within the management team.

Click here to read our e-book and discover all the problems that can derail successful implementation and how to deal with them.

Receive the latest blogs directly into your inbox

Project offices deal with common difficulties regardless of sector, company size or its geographical distribution. A survey done to more than 400 companies reveals that there are common patterns.

In June 2017, ITM Platform launched an online questionnaire composed of 17 questions aimed at studying the maturity of PMOs. We wanted to discover what Project Managers consider the most difficult factors in the management of a PMO in three different aspects: the organization itself, the human resources/project teams and cultural factors, such as the presence of sponsors that promote the performance of the project office.

The questionnaire has a double dimension.

First, it is designed to find out what are the main barriers of existing project offices.

Second, it allows other companies to find out if they need to implement a PMO in their organizations to face their current challenges.

Depending on the answers, the questionnaire provides tips and resources related to the implementation of a PMO, project management methodologies and change management processes.

We have prepared a simple infographic with the most notable results.

How do you think you would stand in comparison? You can still do the test:

The PMO questionnaire, in detail

The questions

The questions were the followings:

Organizational factors

1.Are at least 30% of the activities of your organization based on projects?

2.Do you have departments or transversal functions?

3.Has your organization grown and needs new procedures?

4.Do you have problems with meeting deadlines, cost, scope and quality?

5.Is the information shared in your organization uniform?

6.Is it difficult for your team members to internalize the priorities of the organization?

7.Have you noticed that the work progresses in a spontaneous or decentralized way?

Factors related to talent

8.Is there a training deficit among your project managers?

9.Is the experience of your project managers unequal?

10.Have you detected that your most valuable workers are over-designated?

11.Are your project members interchangeable between projects?

12.Do you have reliable metrics to measure the performance of your team?

Cultural factors

13.Is there a clear agreement on the priorities of your organization?

14.Do you have enough internal leadership to implement project management?

15.Do you have sponsors among senior managers?

16.Does your organization have a “continuous learning” culture?

17.Do you intend to rely in a new PPM tool?

Here are the results we had at the beginning of December 2017:

It stands out that only question 13, about the consensus of business priorities, obtains a balanced percentage of yes and no. In all the other questions, one of the options is clearly the most common.

Attributes of project-based organizations

A quick consolidation of the answers shows that there are common challenges for PMOs, like features that must be met to be a project-based organization, and other responses that indicate that the organization is not project-oriented.

8 of the questions are useful to define if a company has the main traits of a project-based organization that has a project management office or that needs one.

An organization needs a PMO (and has the conditions to implement it) when:

More than a third part of the time of the employees is dedicated to projects
The company is structured as a “Matrix Organization” (that is to say: it has equipment, projects and transversal functions)
Team members are assigned to professional categories and are interchangeable
There are project leaders with the ability to make decisions that go beyond the unitary managements of projects.
Management understands the need to centralize the administration of the project portfolio.
There is a culture of continuous learning
The advantages of using a portfolio management tool are known

PMO challenges

On the other hand, the questionnaire identified 8 common challenges that motivate the implementation of project management offices:

The organization needs new procedures
Projects are not always successful: There are delays, extra costs or poor result at the time of delivery
Information is not uniform, or there is no single source of validated project data, such as a PPM software
There are difficulties for project teams and project managers to assimilate the priorities and apply them in their daily work
There are differences among project managers in terms of experience, knowledge and training needs
Projects fail because there is a lack of organization and coordination between PMs.
The most valuable experts are overloaded with work and have become bottlenecks.
There are no reliable metrics and KPIs to measure the performance of projects in their execution.