The Growing Importance Of The Enterprise PMO

Digital disruption has moved from an infrequent inconvenience to a consistent stream of change that's redefining markets and industries. IT leaders report a dramatic increase in both risk tolerance and willingness to change, and have shifted their focus accordingly from risk avoidance to time to market.

“ Zombie project management offices (PMOs) will be slain”

Program and portfolio management (PPM) leaders must embrace these changes if they are to establish organizational agility and sustain change at a rate that can keep up with digital disruption.

“Traditional PPM roles and structures have to change. Bureaucrats will be banished. Zombie project management offices (PMOs) will be slain,” asserts Robert A. Handler, vice president and distinguished analyst at Gartner. “Proactive PPM leaders will find that they and their respective organizations have become change enablers focused on what matters most — investment management, resource management and dependency management.”

In response to the increasing pace of disruptions, a growing number of seemingly distributed and often disparate PMOs have emerged across business areas. Distributed PMOs traditionally appear when faster response to change is required, while centralized PMOs emerge when risk and cost control are paramount.

The rise of the EPMO

Organizations now appear to want the benefits of both a distributed PMO and a centralized PMO. This is giving rise to models that are somewhat integrated — creating distributed or disparate business and IT PMOs connecting into an enterprise PMO (EPMO). This is a logical consequence of digital business, which is network-oriented. Essentially, EPMOs are evolving into change hubs for business networks that are constantly in flux. Gartner predicts that by 2021, 50% of large organizations will have integrated disparate business and IT PMOs into enterprise EPMO hubs to enable digital transformation.

“ An EPMO makes for an integrated model providing both business-unit responsiveness and central coordination”

“If this seems like a stretch, it isn't. If anything, it's cautious,” says Handler. “In a recent Gartner survey of PPM leaders, respondents averaged nine PMOs in their respective organizations, with 91% of respondents reporting they had an EPMO and 33% stating they reported into an EPMO, up from 22% two years ago.”

Aligning distributed PMOs with an EPMO makes for an integrated model providing both business-unit responsiveness and central coordination. PPM leaders should focus on identifying existing, as well as potential, PMOs and establishing the appropriate reporting structure and integration standards, particularly around people, processes and metrics. Governance and funding mechanisms will likely need to be tweaked to get the right balance of control and autonomy. Rationalizing the tools in use should also be a priority. Although it's unlikely one tool will enable all PMOs and EPMOs, a manageable set will be considerably better than an unwieldy cluster of PPM tools.