Although the Clinger-Cohen act was passed in 1996 that mandated a capital planning and investment control process, PPM as it’s found in the private sector is only just making its way to the federal government. As a recent memorandum from the Executive Office of the President notes, ‘the stove-piped and complex nature of the Federal enterprise has led over the years to a proliferation of duplicative and low priority investments in information technology (IT).’
The Federal Government is now focusing on maximizing the return on American taxpayers’ investment in government IT by instituting a new IT portfolio management process. Their goal is to root out waste across the Federal IT portfolio and avoid investment in low priority and duplicative ITinvestments.
As the Federal Chief Information Officer mentions in a blog post, over the next year agencies are required to lead agency-wide IT portfolio reviews within their respective organizations. This will lead totargets for IT spending reductions, illustrate how investments within the ITportfolio align with the agency’s mission and business functions, establishcriteria for identifying wasteful, “low-value,” or duplicative investments and improve governance and program management.
As election seasonstarts, it will be interesting to see how the different candidates discuss costreduction for the federal government. For our part, Daptiv recently partnered up with Winvale to help the government agencies with thiseffort. We hope over the next few years we can share some of our experience tohelp the US government’s IT portfolio reduce costs and improve business
What’s in a name? As far as PMOs are concerned, it matters quite a bit. Standard parlance maintains that PMO stands for Project Management Office. Back in the days when the PMO literally ran a single project or program, the name was fine. But over time the PMO has evolved. Its scope of work has increased manifolds- first, it performs its core responsibility- to run all projects, next it sets up a methodology, and finally serves as a center for strategic portfolio planning. The charter of the PMO has now evolved to a point where the acronym bears little relevance to its traditional meaning.
To begin with, there is this notion that the new strategic PMO can be run by a good project or program manager. Indeed, most PMO Directors that I’ve met come from the project management ranks. While many perform admirably, their first inclination is to enforce methodology discipline – the death knell of many a PMO. Without a solid business background PMs are often ill prepared to handle the strategic trade-offs of the portfolio selection and planning process. Portfolio management is in essence a business process requiring strategy and operations expertise. In fact, analyzing competing business priorities does not require PM skills at all. It requires keen facilitation skills to handle the contentious debates that crop up between VPs arguing for their pet projects. Furthermore, a solid understanding of what makes a company tick while holding business stakeholders accountable for business cases.
Consequently, this leads to another area where PMO struggle and that is Benefits Realization. If we’re going to posit a business case during portfolio planning, shouldn’t we harvest the results as feedback? Shouldn’t we hold the business sponsors accountable for the benefits they claimed would be returned? Yet this is, again, a business function that occurs post project, and is often not dealt with by the “Project Management Office”. Project Managers like to “close” projects and assume they’re done once they hit “go-live”. But, benefits take months and even years to be realized and gathered and so fall outside this traditional project management thinking.
Finally, even if a solid PMO Director is in place, the “project” moniker still invokes too narrow a scope in the minds of business stakeholders. Without their full buy-in to the strategic nature of the PMO charter it is very hard to succeed.
So, the question here is – how to fix this problem? Is it really just about changing the name? Well, in my opinion that’s a start but what would really help is a change the way organizations perceive the charter of the PMO and its implementation process. The evolved PMO is really a strategic planning function focused on implementing change (the project management part) in the organization. It should facilitate portfolio planning, monitoring, and results to ensure strategic alignment and analyzing benefits returned for th investment. Project Management, Resource Management and the like are tools in service of the broader business goals. Several new acronyms have been proposed, including Portfolio Management Office (keeping the PMO moniker), sPMO (Strategic PMO), Project and Portfolio Management Office (PPMO) and the more light-hearted 3PO (Project, Program, and Portfolio Office).
The PMO has already grown well past the Project Management Office charter – isn’t it about time the name did as well?