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Gartner’s Roadmap for Effective PMOs of the Future

The majority of PMOs are not prepared to meet the dynamic needs of the evolving industry and the blame goes to their reliance on traditional techniques. Here’s why.

Gartner recently released a detailed report on the current state of Project Management Offices (PMOs) across several organizations. It states that a majority of PMOs are not prepared to meet the dynamic needs of the evolving industry and the blame goes to their reliance on traditional techniques.

Older approaches and models are no longer effective in the present-day competitive environment and are hindering the much-needed evolution of PMOs. The report also states that PMOs need to enhance their operations by becoming more dynamic and aligning their values with strategic objectives to ensure lasting success.

PMOs need to move on from conventional value measures like execution efficiency to strategic business values.

By 2025, this will become a mainstream focus for about 75% of all PMOs. So why not stay ahead of the curve by starting now?

The traditional approach no longer works

Organizational success in the project sphere has always been dependent on two factors: doing things right (program and project management) and doing the right things (portfolio management). PMOs have existed for a long time to give direction in their domain and facilitate project execution and management.

Unfortunately, most PMOs today are stuck at an organizational level where they are not connected with the strategic direction of the business. They are too bogged down by unnecessary details and traditions to provide any real strategic value to the business.

The Gartner report states that

“Executives responsible for executing business strategy rarely view PMOs in this current state as strategic partners.”

They are justified in doing so. PMOs have thus far been limited to the specifics of their domain. Most of them operate in a reactive state today and have a hard time keeping up with business and functional demands.

They might be executing their projects with efficiency. But without strategic direction, the effort doesn’t result in a significant impact. The once reliable and successful processes traditional PMOs had are becoming obsolete and their strategic role is getting stifled by the rigid confines of convention.

Here are a few of the essential elements that modern PMOs are missing.

  • Strategic partnership with the business leadership due to a growing disconnect
  • Collaboration and consistent communication between top management and the PMOs
  • Top-to-bottom understanding of key business objectives and targets
  • A structured approach to determine priorities and focuses
  • The ability to quickly respond to changes
  • Affirmation of PMOs’ business value in the eyes of management

Strategic portfolio management: What does it mean?

Strategic portfolio management delivers a robust link between top management and the people executing things on the ground. It helps senior management with maintaining both visibility and control over priorities and establishing a direction for the business.

In its essence, strategic portfolio management deals with deciding the focus of an organization’s resources. Any business deals with multiple challenges and issues at any given time and may not have the resources to tackle all of them at once.

Strategic portfolio management ensures that the priorities you select align with the strategic objectives of your business. This means facilitating in answering the tough question regarding what to do and what not to do. If something doesn’t closely align with business objectives, it can wait. It’s as simple as that.

You might be wondering how PMOs are involved in all this. The next section will talk about that.

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How do strategic portfolio management and adaptive project management help PMOs keep up with modern demands?

It goes without saying that projects are essential for any organization’s growth and PMOs are at the center of that. Strategic portfolio management with PMO allows businesses to align project goals with those of the organization and synergize all efforts towards essential objectives.

Gartner suggests leveraging technology and overhauling PMO processes to ensure success.

“The PMO must evolve, and even reinvent itself. It must do so to address both of these types of enterprise needs, and to fully support the evolving business it serves.”

Through a collaborative approach between senior management and the PMO, organizations can move on from unproductive traditions and embrace the requirements of the modern industry. That’s where adaptive project management comes in.

Adaptive project management is a process of implementing gradual changes to the organization where each subsequent change improves over the one before. This systematic approach helps management look back and learn from the outcomes of earlier decisions. The approach considers as priority continuous introspection and is capable of working with any methodology within the project organization.

SPM (Strategic Portfolio Management) and adaptive management work together to steer PMOs in the right direction. This unified approach doesn’t prioritize the execution of projects over the strategic value of the portfolio to the organization but rather connects senior management with the implications of projects and whether the outcomes align with the overall vision of the company. The focus is on building a bridge between operations and strategy and using the established framework to deliver value.

Here are some major changes any PMO will experience immediately after applying the two approaches in concert.

  • The organization would enjoy better, more efficient strategic partnerships with clients
  • A more robust system of collaboration with business leaders for more effective portfolio management
  • The ability to remain flexible despite changing deadlines and varying scope while improving management’s ability to assess and adapt to new situations
  • A comprehensive system that utilizes modern technologies can be placed to support effective planning and project scope delivery
  • Formulation of a repeatable framework that can be adjusted and implemented across departments and scale
  • Creation of a recognizable value for the organization to have indefinitely

From a directive to a dynamic structure: PMOs of the future need to be adaptive

Gartner states in its report that PMOs today are directive in nature. This worked in the past when projects weren’t as cross-functional and complex as they are today. However, it is imperative that PMOs change their ways and become more dynamic. This change can’t occur overnight. A sustainable migration plan requires a three-pronged approach that ensures continuous improvement in small iterations.

Here are the three steps Gartner believes are essential for the transformation of traditional PMOs:

1 – Moving out of the directive state

The first priority for PMOs is to move from a directive state and get a seat at the table. For that, PMO leaders need to identify key business leaders and collaborate with them to restructure their own processes.

It’s just like how a traditional project manager works with clients and other key stakeholders. Get them on the same page through effective communication and you’ll notice the difference.

Gartner believes that this stage will create a foundation for the new PMO and will allow PMO leaders to understand overall enterprise needs.

“The objective is to create a blueprint for a redesigned PMO; one that is heavily influenced by what business leaders need from the PMO to achieve strategic business goals and outcomes.”

Resultantly, the PMO will be the one on the lookout for new opportunities to add value rather than focusing solely on what was assigned to them from the top.

2 – Embracing change

The second stage is to establish an effective prioritization process. Now you know what the next focus of the enterprise is, so the projects and their execution have to be in line with that. This is where strategic portfolio management will help you out. As a partner, the PMO has to develop specific strategies, goals, outcomes, and processes as well. Doing so would help its leader adapt in case of a shift in organizational priorities.

Another important step for PMOs is to redefine their value metrics. Traditionally, the focus has been on project execution metrics. However, it should be based on how well PMOs deliver business value to the enterprise. This has more strategic value and will truly change PMOs for the better. It’s also important to realize that execution metrics still remain critical as you can’t succeed without them. However, they shouldn’t be the sole focus.

3 – Adopting technologies that support continuous delivery

For lasting success in an organization, strategic portfolio management and adaptive project management need to complement each other. This will slowly and iteratively increase PMO competency and support faster evolution.

Managing both strategic portfolio management and continuous value delivery requires the use of dynamic tools that support cross-functional capabilities, improve transparency, and make it easier to achieve enterprise-level collaboration. The right tool can go a long way in making the PMO process more focused, structured, engaging, and pragmatic.

Strategize effectively, exercise control, and enhance your productivity with Kissflow Project

Facilitating enterprise-level collaboration and maintaining efficiency in execution requires a capable tool that does the job without over-complicating things. Moreover, strategic portfolio management requires consistent collaboration between top management and the execution team. Information needs to flow both ways so everyone remains on the same page.

The PMO needs to act as a bridge between top management and the execution team. Kissflow Project, which offers quality visualization capabilities and transparency, can be a great partner in doing that. Its functional capabilities, along with its advanced analytics and the reports it offers are everything a dynamic PMO needs to meet expectations.

Enterprise-level communication and strategic management are not the only places where Kissflow Project shines. It also comes with advanced capabilities to support various functional teams and significantly improve their productivity.

For instance, Kissflow Project offers a variety of pre-made templates designed to facilitate functional teams in their day-to-day operations and key projects. Planning roadmaps, creating project schedules, creating content plans for marketing teams, or any other situation teams regularly deal with. Kissflow Project offers tailored solutions to make things structured and help teams focus on their tasks better.

Gartner believes that almost all dynamic PMOs of the future will be leveraging technology and predictive analytics to their fullest in the next few years. Choosing Kissflow Project, with its unparalleled versatility and strong reporting features, can be a first step in the right direction.