Learn how to avoid a PMO throw down with this EPM Live analysis of the EPMO vs. IT PMO: Strategic Alliance or Battle Royal?
I recently read an interesting article about the relationship between the PMO and the EPMO: a symbiosis or open warfare? In this Gartner research paper the authors outlined the hesitant and sometimes combative relationship between a new EPMO (Enterprise Program Management Office) and the IT PMO (Project Management Office). Listen, change is hard and when it happens in the workplace it can make people feel uncomfortable but it can also be a great thing. The issues that arise during this transition are primarily because there are few precedents available to help guide the assimilation. Gartner stressed the importance of these two positions coming together and building a positive relationship to ensure they are in synch and able to work together productively on future projects.
Gartner found that EPMOs have four different types of styles they generally conform to depending on the overall corporate culture and market dynamics. Within each style there are different levels of effectiveness that Gartner says can create problems and/or opportunities. They suggest the IT PMO quickly and objectively size up the new EPMO regarding their underlying intentions, their degree of capability, and the policy-execution and mission that they have been assigned. This will help the IT PMO better understand the new role within the organization and identify how this person is being asked to work with them. It’s then the IT PMOs ability to navigate the gray areas that attribute to the success of their working relationship and productivity working together.
The best way for the IT PMO to prepare to work with the new EPMO is to better understand the four different EPMO styles.
- The Reporting EPMO – This style gathers data about major initiatives from multiple silos within the organization and detects actual (or potential) issues and mismatches of performance versus expectation. Most organizations start out with a “portfolio” of projects that is typically a little more than a list, and over time (if the EPMO is successful) that list grows and the Reporting EPMO transitions into something closer to the operational EPMO or the strategic EPMO.
- The Operational EPMO – This style centralizes all business projects (including all IT application projects) into a single organizational reporting to the CEO.
- The Strategic EPMO/Strategy Realization Office – This style is focused on ensuring that the projects and programs that are undertaken in the organization measurably contribute to the realization of the enterprise strategy. They generally will demand improvements in the IT PMO portfolio and business case approaches.
- A Business Transformation Office (BTO) – This style is charged with changing the basic DNA of the enterprise. Since IT has such a major influence on the core of the organization, the BTO will generally have a considerable and significant involvement in how IT management is run and when and where IT spends its money and time.
Here are a few housekeeping actions IT PMOs will want to consider regardless of the EPMO style.
- Review your PMO style and compare it with the new EPMOs style to identify any potential conflicts or boundary issues. This also allows the PMO to reassess their management style against the evolving needs of the organization.
- Develop issues/escalation scenarios for “gray” areas. According to Gartner the leading gray area their clients reported was around how IT manages its resources. Successful project execution requires the reliable availability of resources. The second most common gray area found by Gartner generally has something to do with ownership of the PPM methodology. A very simple answer to this complex dilemma is that IT should own its own software development life cycle (SDLC), but PPM is owned by the enterprise.
- Develop agreements around the governance structure for projects and programs. Who does health checks, and who gets to determine the real project status (red, green or yellow)? Who will track project deliverables? What will be the role of the EPMO staff in your projects or programs? Who can stop a project that’s gone off track? Who approves change orders above a certain tolerance? Who does the program rescue?
Here are a few tips for to help work together better:
A Strong EPMO:
Realize that reporting EPMOs generally bite off more than they can chew. Assess the situation, if the EPMO is staffed with solid professionals and operating under a clear mandate then it’s time for the IT PMO review their type and quality of data and make changes as necessary. The goal is to be on top of your game and be able to answer any questions they choose to ask you.
A Weak EPMO:
On the other hand if the EPMO and their group are poorly defined and operating with a weak executive mandate work with them to define and clarify a one-size-fits all phased reporting structure and define what project data really needs to be tracked.
Understand that centralizing all PPM in an Operational EPMO still leaves a lot of project-oriented work in IT. If faced with an operational EPMO, be clear that, in all likelihood, neither your resource capacity nor resources assigned to projects will be yours to use where and when you want. Work with the new EPMO and come to an agreement as to whether IT will operate as a “software factory,” a “center of competency” or a functional silo with regard to its support of application-oriented projects.
The Strategic EPMO must focus on strategy, which will result in pressure on IT to better manage resources The strategic EPMO forces a clear delineation between operational and strategic projects. The IT PMO will still be responsible for preparing portfolio reports showing why the projects are being done, and — if 90% of all projects instantly become tactical — the EPMO will force a discussion as to why, strategically, the corporate strategy is being supported by that amount of “growth” or “operational improvement” level of spending.
If faced with a new Strategic EPMO, heads of existing IT PMOs need to stop prioritizing demand. In fact, they should stop using the word “demand” entirely and switch instead to talking about investments, capabilities and value delivered. It will be important to understand your resource capacity, and to sequence the projects you have in your portfolio in such a manner that you can ensure reliable delivery.
Business Transformation Office (BTO):
The Business Transformation Office must involve itself in IT’s business. The existence of a BTO doesn’t necessarily force any structural change in IT’s approach to PPM. The key concept to remember is that the BTO is all about changing “business as usual.”
The IT PMO needs to ensure the application portfolio exists and is structured in a manner that supports future oriented decision making. Stop time-slicing resources and understand your resource capacity. If the transformation plan starts running behind schedule, be sure to have a midterm plan in place so the current operational situation doesn’t start to deteriorate.
The New Way to Work Together
EPM Live understands the hurdles that come with disparate silos within the organization. EPM Live believes that these hurdles can easily be tackled by following Gartner’s above research on what seems to be their spin of the Myers & Briggs personality test, but by also creating a centralized system that allows each team to work with the tools and views that best suite their overall goals. The EPM Live solution is built with industry best practices and capabilities to help each individual work more productively on their assigned tasks and projects as well as work more cohesively with other team members.
One Size Does Not Fit All
EPM Live understands that one size does not fit all. EPM Live’s platform is the first build-to-order platform that extends project portfolio management (PPM) to all areas of the business regardless of work focus. Small to large organizations can apply cost saving disciplines such as delivering projects successfully, optimizing resource utilization, and selecting the right work to all business teams including new product development, IT, services, operations, sales and project management.