Latest market updates shape the future of portfolio management and have been proven to have lasting benefits. As we observe and build the future of PPM and how PPM can help your company navigate industry disruptions, it is helpful to look at the bigger picture of what has caught on and why it has stuck around and been widely adopted. Here are a few of the more recent trends and innovations that we have observed across PMO teams that are making strides in the industry and building the future of PPM.
The Shift to Digital Business
A fairly obvious but no less significant of an innovation is the movement toward digital business and the impact that has had on PPM. It has long been difficult to capture information into a single report but remote working, disparate tools, and flexible/less conventional working habits have only added to this problem. Many speculate on the longevity of remote working, but one thing is clear – those that adopted digital business are better suited to handle uncertain business conditions. Those that had in place a centralized method to track project progress, re-prioritize investments and resources to align with strategic business priorities, and a central source of truth and communication was paramount to leveraging digital business at scale.
Significant Changes in Delivery Models
Increasingly, PMOs are supporting more than just IT units and diversifying the business units they support. A growing need for PMO support is within product development and bringing products to market - a great example being how software intelligence can propel your PPM and organization to new heights. In turn, the principles and benefits of product management can be applied to other areas of project management to deliver better, faster end results. This broad application of product management to project management has proven to build customer (stakeholder) satisfaction and build PMO integrity through continuous delivery and improvement measures. As PMO teams grow and mature in their processes, they are able to apply feedback to next iterations of the project and manage to outcomes rather than traditional activities and KPIs that do not always align with end goals. Strategic PMOs are beginning to adopt these new delivery models and this trend is proving valuable for business stakeholders.
Leveraging the PMO for Organizational Agility
High performing PMOs are able to aide decision making and guide business direction through data and insights into the most important areas of the business. As agile benefits work their way up the chain, organizational level agility allows the business to maintain strategic vision and execute against those deliverables. PMO leaders are able to continually prioritize and offer scenarios for the business to stay on track with strategic vision. Teams are able to respond quickly to changing demands and turn with the organization. Find out more in the top five basics of managing agile PPM.
While the PMO has always been ‘business-driven’ this notion has taking on a new meaning in recent years as the role and expectation of the PMO has evolved. Project and portfolio leaders are no longer a supplemental unit but a critical element for strategy execution. Instead of justifying existence, PMOs are being deployed enterprise-wide and relied upon for strategic innovation. The adoption of enterprise project and portfolio management (EPPM) has never been so important - so what is EPPM and why is it becoming more important.
Aligning Project Execution with Business Strategy
Achieving a business-outcome focus is one of the key traits of the next generation PMO. Aligning your project execution with your high-level business strategy starts with defining what the vision and strategy is for the business and the intended goals and outcomes for each project. Understanding how projects support specific business directives ensures the projects your team are investing in are best suited to meet business needs. Using PPM to deliver adaptive portfolio prioritization and funding is a key component to help the PMO with this exact practice. Key features that provide PMOs with capability to drive toward business outcomes include:
- Visibility into the projects and status of projects within the portfolio at any given time
- Project Intake & Scoring ensures all projects are scored and weighted based on the value they provide to the business
- Portfolio Prioritization provides a central location to both create a portfolio roadmap and update/maintain the projects in flight based on current business demands
- Resource Capacity Planning allows portfolio leaders to only invest in those projects that have the resources to complete them
- Product and Portfolio Forecasting automates the process of consolidating data and ensures balance between strategic and essential work
- Portfolio Reporting provides analytics and insights into all project work across the portfolio to help leaders identify red flags, make decisions, and continually improve the work of the PMO
Top-Down vs Bottom Up
Accommodating both strategy-to-project (top-down) and project-to-strategy (bottom-up) is a necessity for PMOs today. With standardized reporting, collaboration, project tracking, and adaptive resourcing, the PMO is better equipped to handle challenges that come their way. Project portfolio management software is the most productive facilitator for this, enabling real-time visibility and control. Here is a quick comparison of top-down vs bottom up project portfolio management.
The Impact of Agile Project Management
If you’re not currently incorporating agile project management techniques today, as your PMO responds to changing business strategies or shifts in the competitive landscape then it’s pretty certain you will be in the future. Digitalization is driving more organizations to adopt agile practices in favor of traditional approaches for a product-focused management strategy.
Agile project management is growing in popularity, and has been on an upward trajectory for quite some time, because it works. Managing projects to outcomes, adopting more flexible working methods, and delivering smaller amounts quicker are all geared toward customer satisfaction which for the PMO is often stakeholder satisfaction. Regular feedback on progress and minor adjustments to keep on track allow project managers the ability to set better expectations and deliver a better outcome. That’s not to say that all projects should be managed with agile – in fact, many are better suited to traditional methods or any degree between the two. Hybrid models can be the best of both worlds for many teams looking to maintain structure while still reaping the benefits presented through agile.
What is important is what happens at the portfolio level and that projects can be rolled up into a portfolio that makes sense for the business and aligned with a strategic imperative that moves the needle. The ability to consolidate projects and products into a single portfolio, regardless of the methodology they are executed in, allows business leaders to see what the impact of those projects are for the business and make informed decisions with better visibility.
The other critical piece for PPM leaders is that agile should not replace project governance – rather it relies on it. Without proper project governance in place, agile projects may get off course, and the PMO maintains a level of standards for project delivery. With the right amount of governance, combined with the right toolset to ensure information is in the hands of those that need it, will provide both project managers and product developers the freedom to do their best work with minimal interference. Often times this requires integration between systems but visibility and communication will solve a lot of issues as you incorporate agile into your project mix.
The Strategic Roadmap
Many PMO leaders know they need to be more strategic. They may even think they already are a strategy-focused organization. But in order to really ‘get there’ you need to know both where you are currently and where you want to be. As far back as 2014, our analysis of the PMI "Pulse of the Profession" survey highlighted just how difficult it can be to achieve a strategy-focused organization. Use this quick overview to define the steps needed to create a strategic roadmap for the Next Gen PPM.
Understand where you are.
This requires a bit of inward evaluation as well as external perspective. What does the business think of the PMO? How do peers or other units perceive the PMO? What are some of the strengths, some of the weaknesses, and some of the recent movements that have helped? Learn where you are and document this stage.
Establish core values.
PMOs should have guiding principles or core values that are both clear and communicated to all members. Does your PMO value governance and consistency? Does your PMO embody a growth mindset or on a mission to improve project management throughout the company? Is your PMO primarily customer driven and makes decisions based on the value it brings to your customers? Whatever the core values that are agreed upon will help you shape your strategic roadmap.
Define key focus areas.
Which specific areas of PMO advancement is your team focused on preserving and developing? There might be foundational elements that the team does really well that need to continue on and there might be other areas of project management that are critical to develop. Those focus areas will help define the future of the PMO.
Evaluate where you want to be.
This might not be as easy as it sounds because future states are often vague or not fixed. Before knowing where you go you need to understand where you want to be and this requires specifics. What are the outcomes you would like from your PMO that you are not seeing in your current state? Is it a perception or a reality thing? Who are your advocates and who are your non-believers? This all helps to determine direction and focus.
Design with the end in mind.
With a clear goal and vision, it helps to work backwards to figure out how to get there. Even if the end goal changes as you go along, the development along the way will be in the direction of where you want to be. Becoming a strategy-driven organization requires clear strategic vision from the top down and objectivity to align current and planned work to that vision.
Bring Strategy to Life
Developing a strategic roadmap is essential for the advancement and growth of the PMO. The right practices combined with the right toolset will provide a solution that sets the business up for success in the long term. Aligning the entire PMO around common goals will result in a winning combination of people, process, and tools that bring strategy to life.
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