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Posts Tagged ‘Project management Office’

The PMO and the business model: A continuous interactive loop

Posted by Ammar Mango on June 19, 2014

PMOs are responsible to execute strategy.  But what if the business model is flawed? Most organizations are not ready to deal with this risk.  They always assume the business model is fine, when in many cases it is not.  So what is the role of the PMO in validating the business model assumptions? And how can an organization ensure they are functioning based on value-adding business model that works.  

Strategies are put based on where the organizations want to be in the future and what they want to offer.  However, some strategies prove not feasible, even if executed perfectly.  To demonstrate here are a couple of high level quick examples:

– Company A had a business model that would work perfectly well today, but they had one problem: they implemented the model 20 years ago.  So what they offered 20 years ago would have been perfect today, but not when they offered it back then.  They went bankrupt.  Do not get me wrong; they had a perfect PMO setup.  Their PMO sat on board meetings, ensured projects are proposed evaluated, and selected in alignment with strategy.  Then the PMO ensured the projects were successfully executed.  Unfortunately the whole model was flawed.  It took a marketing executive to come in and give them the bad news.  And by the time they got it, it was too late.

– Company B developed an ingenious software application in the 1980’s.  It was perfect for the mid 90s market.  He was ahead of the market.  

– Some are late for the market.  Company C came in with a different twist on the services it wants to offer.  It looked good on paper, but the customer did not feel their product wad different enough to leave their existing suppliers and work with them.  

All these are examples of flaws in the business model.  Usually, it takes a special kind of expertise to catch such flaws.  It usually is a mix of experience, understanding of the market, and partly luck.  Most of the time, such expertise and capability is not in the PMO.  So, how can a PMO help in ensuring the company has the right business model?  Another pressing issue is how do we ensure our model will work?  The problem is that you cannot be 100% sure.

I have rarely seen a PMO capable of contributing effectively on this issue.  I think the main problem is that most PMOs see themselves as executors, not strategists.  Even when hiring PMOs most companies do not look for a strategist.  They want a doer.  At one point the market will start realizing that we need a doer yes, but we cannot do much without a good business model.

There is good news and bad news in this.  The good news is that in a dynamic environment, a business model can be flawed and then refined.   The important thing is to setup the organization where continuous short loops of feedback are available so we do not invest too much too soon in a wrong business model.  So, organizations need to setup in a way that ensures the business model is always challenged and refined, then reflected in execution. This requires high level of maturity and willingness to change on the part of the executives first as well as the whole organization.  

Even if a company had a good business model for a while, things do change fast in today’s environments.  So, we need a continuous challenge of the way we do business and for that challenge to be encouraged across the organization.  

Setting up such an environment requires executives who have enough confidence and conviction in the importance of change, to allow such changes to take place.  

 

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Why a Project Management Office? and other “Offices” out there

Posted by Ammar Mango on October 13, 2012

In today’s dynamic environment, maintaining the status quo is seldom an option.  Strategies always call for new initiatives to be implemented, and the only vehicle out their to deliver the value sought is projects.  If projects are so important for organizational success and even survival then having a functional unit that helps the organization improve its projects performance.  That unit is the Project Management Office: PMO.

A PMO comes in different shapes and sizes, excuse the cliché, and can perform different functions for the organization.  Most references out there talk about four types of PMO: Strategic, Directing, Supporting, and Controlling.

Strategic PMOs report to a chief, usually the CEO.  These PMOs are responsible for portfolio management related functions that focus on project management at the strategic level.  They oversee the advancement of the organizational maturity in project, program, and portfolio management, without getting into details of implementation, leaving that to other PMO units at lower organizational levels.  However, the SPMO as many like to call it interfaces with other departments in the organization including lower level PMOs to ensure Organizational Project Management policies are being interpreted correctly and implemented throughout the organization. They also evaluate the effectiveness of organizational project management improvements undertaken by the organization.

Directing PMOs are directly responsible for organizational projects.  They have project managers reporting to them and are responsible for delivering successful projects across the organizational functions.

Supporting PMOs do not manage projects, but they provide important resources to support the successful delivery of projects.  This includes training, software tools, processes, etc.  They might also take on auditing responsibilities to ensure adherence to organizational project management policies and procedures.

Controlling PMOs, are also called Project Control Units (PCUs).  They are a function responsible for projects monitoring and controlling.  This unit does not manage projects, but gathers progress information, issues, risks status, etc on projects and reports them according to preset and documented progress reporting cycle.

In addition to the above mentions PMOs there are other units that are responsible for a specific project or program.  These are called Project Office and Program Office respectively.  Project Office has responsibilities on one specific major project in the organization, and usually is temporary and gets dismantled at end of project. The Project Office is under the responsibility of the Project Manager usually.  A Program Office on the other hand can be ongoing, since programs can be ongoing.  The Program Office is under the jurisdiction of the Program Manager.

People who run these units need to be a force to be reckoned with.  They must have the expertise as project managers themselves, know how to play politics, understand project management, and have the leadership skills necessary to spearhead this difficult to run unit.  They must be able to communicate and convince.  They also need the wisdom to know how to manage the customer expectations, project managers, management, and department managers.  This is a very difficult job.  Only those who tried it can appreciate the challenges of such positions.

PMOs fail too often for reasons related to people as usual.  One of the main reasons for PMO failure in my opinion is the lack of a clear agreed upon, and communicated governance.  Another is the lack of a capable PMO leader.  There is also the unrealistic expectations of having an effective PMO without investing in building it properly and equipping it with the right methodologies, resources, and tools.

PMOs need time to mature.  Their maturity might go through different stages where the PMO gradually takes on more responsibilities, as it matures and as it gains more acceptance. Executives must nurture their PMOs just like a baby needs nourishment, support and protection until it grows strong.

There is no need to sell organizations on the importance of PMOs, as most organizations have them, are building them, or thinking of doing so in the future.  Organizations who do not find a way to build their organizational project management maturity might find out the hard way how important doing so is to their survival, and how long it takes to build this unit correctly.

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