Ere isn't a business case for the "old school" project management oce (PMO) today's PMOs are under pressure to demonstrate value without generating revenue. The next-generation PMO accomplishes this by creating a framework that fosters the investment process.
Ere isn't a business case for the "old school" project management oce (PMO) today's PMOs are under pressure to demonstrate value without generating revenue. The next-generation PMO accomplishes this by creating a framework that fosters the investment process.
Ere isn't a business case for the "old school" project management oce (PMO) today's PMOs are under pressure to demonstrate value without generating revenue. The next-generation PMO accomplishes this by creating a framework that fosters the investment process.
Making The Case For The Next-Generation PMO by Margo Visitacion for Application Development & Program Management Professionals 2009, Forrester Research, Inc. All rights reserved. Unauthorized reproduction is strictly prohibited. Information is based on best available resources. Opinions reect judgment at the time and are subject to change. Forrester, Technographics, Forrester Wave, RoleView, TechRadar, and Total Economic Impact are trademarks of Forrester Research, Inc. All other trademarks are the property of their respective companies. To purchase reprints of this document, please email clientsupport@forrester.com. For additional information, go to www.forrester.com. For Application Development & Program Management Professionals EXECUTI VE SUMMARY ere isnt a business case for the old school project management oce (PMO): Weve tried it, and quite oen it didnt work. Todays PMOs are under pressure to be business process change agents that demonstrate value without generating revenue. PMOs can be a key dierentiator, and the next- generation PMO accomplishes this by creating a exible framework that fosters the investment process, managing multiple types of work, adopting Lean techniques, and providing tools and support that adapt well to increasingly Agile environments. In todays business world, if youre planning to create a new PMO, think pragmatically and build a business case for the new project management oce. TABLE OF CONTENTS Todays PMO Its Becoming Obsolete The Next-Generation PMO You Need It What Does The Next-Generation PMO Look Like? Organizational Roles In Next-Generation PMOs Flexible, Lean Frameworks Are Crucial Is Your Company Ready For A Next- Generation PMO? Organizational Models Are Important Preparation Is Critical RECOMMENDATIONS How To Build A Next-Generation PMO NOTES & RESOURCES Forrester interviewed 15 vendor and user companies. Related Research Documents Dene, Hire, And Develop Your Next-Generation Project Managers October 15, 2009 IT Demand Management And The PMO October 10, 2008 What Successful Organizations Know About Project Management May 26, 2006 October 16, 2009 Making The Case For The Next-Generation PMO Broader Visibility And Flexible Frameworks To Tackle More Work Without Killing The Budget by Margo Visitacion with Mary Gerush and Adam Knoll 2 3 8 12 2009, Forrester Research, Inc. Reproduction Prohibited October 16, 2009 Making The Case For The Next-Generation PMO For Application Development & Program Management Professionals 2 TODAYS PMO ITS BECOMING OBSOLETE Projects arent easy, and managing them successfully requires a balanced combination of art and science. Enter the project management oce, which historically has focused on delivering projects that grow revenues and save costs for organizations. Project management oces have concentrated on nite sets of activities related to new development and projects important to meeting strategic business objectives. Organizations committed to project management excellence in the form of repeatable processes, useful tools, and organizational support have found that meeting critical objectives is well within their capabilities in large part because their PMOs have provided critical support. But this applies to only the 34% of IT investments that make up new development (versus the 66% that make up operations and maintenance). 1 In todays challenging environment, applying a PMOs discipline and enabling visibility into only a one-third of total IT spending isnt enough. And PMOs are missing the boat, because: e PMOs narrow focus misses opportunities. A PMOs emphasis on project and portfolio management provides great insight into new investments, but this overemphasis on new investments is myopic, leaving opportunities to optimize operational and maintenance spending under the radar. With business involvement in technology spend growing, insight into one- third of IT spend isnt enough. IT lacks visibility into the majority of organizational spend. Once project deliverables are deployed, granular tracking of issues diminishes, and organizations lump most change requests into a maintenance or operations bucket. Organizations may try to capture maintenance spend, but they are doing so as a historical exercise, which is very time consuming and dicult to replicate. 2
Business is demanding greater transparency; without it, it will begin to nd its own solutions. Todays economy forces CIOs to demonstrate greater value, and the lack of information around maintenance and support forces IT management into a contentious relationship with business partners. When business and IT cannot communicate about investment and value, the business starts looking elsewhere; for example, it may decide to investigate soware-as-a-service providers as low-risk alternatives for specic business solutions. 3 Cost centers are hard to justify. In conversations with PMO leaders, a common theme immerged: Project success is more common with a PMO in place. But because PMOs are not seen as direct contributors to revenue generation, they are oen under duress to continually prove their value. If an organization doesnt make value realization a regular part of its process, keeping the PMO in existence is dicult to justify long term; low-performing PMOs tend to last only approximately 3.5 years. 4
2009, Forrester Research, Inc. Reproduction Prohibited October 16, 2009 Making The Case For The Next-Generation PMO For Application Development & Program Management Professionals 3 THE NEXTGENERATION PMO YOU NEED IT Organizations today demand greater visibility into IT spend and value. Companies realize that the disciplines that apply to project portfolio management can also help them utilize resources more eectively. 5 e next-generation PMO takes delivery to the next level, shiing from an inwardly facing PMO one that concerns itself primarily with a narrow range of projects to a constituent or outwardly focused PMO: one that applies the disciplines of project management in a lightweight framework that supports broader demand and delivery processes and methods for delivering a wider range of work more eciently. 6 e next-generation PMO is emerging because: Organizations continue to become more project-focused. When times were good, benets realization was a spotty exercise at best. In todays tight economic times, funding requirements continue to grow more stringent, and projects need to the realize benets to obtain funding for new investments. As a result, companies are seeing that taking a more project-centric approach to a broader range of activities enables them to prove an undertakings potential before providing funding as well as to set up the foundations for measurement aer deployment. e PMO is the natural location for capturing and measuring this information. Projects, as part of a larger portfolio, have relationships and dependencies that organizations must manage and measure to achieve broader strategic goals; therefore, the barriers between IT and the business must fall away to enable the PMO to manage and measure this information. 7 Its benecial to extend demand processes for project management to other work types. To obtain extended visibility, companies are applying the rigor they employ with new investments and projects to some maintenance and operational requests. ese companies are putting proactive or planned releases and upgrades through the same levels of review for cost, value, and risk as they would for new investments. Our executive management has lowered the threshold on assessing demand requests. Before, it was either a project or a request for maintenance and enhancements to existing systems and applications. Now, anything over a certain dollar threshold requires analysis and a value justication. ey want to see the impact of every request for funding. (IT director, North American university) Accidental project managers require increased assistance from the PMO. With organizations taking a project-based approach to more work, a new role is popping up in organizations: the accidental project manager, who is a person who has been assigned an initiative but lacks project management expertise and experience. Time and budgetary constraints prevent organizations from providing formal training for these individuals, so PMOs must create templates and tools that assist these temporary project managers in successfully managing projects. 2009, Forrester Research, Inc. Reproduction Prohibited October 16, 2009 Making The Case For The Next-Generation PMO For Application Development & Program Management Professionals 4 Because weve had success with the tools that weve created for our [IT] projects, weve had a lot of demand for help, and as a result, weve started to extend those tools to the folks on the business side who occasionally manage projects. It provides them with enough guidance to manage projects, and it gives us consistent measures. (PMO director, healthcare company) What Does The Next-Generation PMO Look Like? Transparency is the name of the game, and the reach of the PMO now extends beyond just a single business unit or IT organization. PMOs now come in multiple avors and sizes, and they more broadly inuence how organizations make the connection between strategy and execution (see Figure 1). e next-generation PMO provides expanded support by leveraging traditional practices to provide processes and tools to stakeholders who are not familiar with project-based practices. e next- generation PMO benets organizations by: Implementing new practices that take planning to a more strategic level. e next-generation PMO provides support to senior management and C-level executives by applying business case demand expertise to planning and reporting processes. By leveraging tools that provide data reporting capabilities and portfolio and capacity forecasting processes, PMOs can provide executive management with insight into the impact of operational requirements. Removing the emphasis on traditional methodologies. To provide the extended transparency management requires, the PMO removes the blinders as people ask when is a project a project? It applies techniques and practices that can support a multitude of activities. is includes extending appropriate training for the casual project manager as well as incorporating methodologies such as Agile or Lean to focus on delivery over restrictive methodologies. 8 ere was no pressure from development to leverage Agile. We [the PMO] actually lobbied them [development] to start using Agile methodologies for our projects in IT and have had great success with it. We have a broader choice now in how we manage projects, and it works well for us. (PMO director, North American insurance company) Reemphasizing IT-business alignment through planning and demand management. e strategic importance of aligning demand requires alignment not just to business objectives and IT strategy but also to enterprise architecture standards. e next-generation PMOs increasing involvement with demand management extends to analyzing requests for work and resources and aligning them with the four key management functions of IT: demand management, service management, portfolio management, and vendor management. 9 Using processes such as consolidating demand to keep work from sneaking in under the radar. Either organizing work in a more project-based way to require more rigor or more eciently considering everything as work and putting it all through a gateway and calling for 2009, Forrester Research, Inc. Reproduction Prohibited October 16, 2009 Making The Case For The Next-Generation PMO For Application Development & Program Management Professionals 5 a baseline of information to approve or reject work requests enables organizations to better capture the true demand coming into IT. Coupling that with portfolio views and capture of actual work provides IT leaders with a much more realistic view of IT costs. 10 According to the vice president of IT at one eRetailer: Our executive management wants to see not just investment spend and demand but also operational spend and demand. Consolidating demand and capturing the actual eort has opened their eyes to how much is being done and how much it costs. Figure 1 The Next-Generation PMO Provides Support For Strategic And Practical Concerns Organizational Roles In Next-Generation PMOs Structurally, the new PMO isnt radically dierent from todays PMO. e roles are similar but now no longer focus solely on planning and executing IT projects. e next-generation PMO extends its inuence to include business stakeholders as well. Within the next-generation PMO (see Figure 2): e PMO director sets the strategy for methodology. In the traditional PMO, the director sets project and portfolio management strategies for the organization. In the next-generation PMO, the director also leads work and demand process development for the portfolio(s) she manages. She directs development and implementation of training for both formal and occasional project managers. Finally, she must also direct the change control process, as it touches more stakeholders in the next-generation PMO than it would in an inwardly focused PMO that provides support only to projects. Source: Forrester Research, Inc. 55456 IT Business New strategic planning processes Program management Strategic management Value realization reporting New strategic processes Enterprise portfolio management Business case design funding study Enterprise architecture alignment Capacity planning New tactical capture processes Processing demand requests Planned operational demand Planned service demand Planned maintenance demand New planning and execution processes Frameworks for all projects Informal training Funding and business case design PMO traditional practices Formal training Portfolio reporting Internal consulting Metrics Tools Methodology Resource forecasting Progress reporting 2009, Forrester Research, Inc. Reproduction Prohibited October 16, 2009 Making The Case For The Next-Generation PMO For Application Development & Program Management Professionals 6 e portfolio manager creates and manages various portfolios based on strategic objectives. Strategic and operational objectives determine portfolios creation and reporting. Portfolio managers work with the appropriate stakeholders to build the portfolios and perform analysis of options and impacts as demand shis. Financial managers report portfolio progress against plan. Depending on organizational size, the portfolio manager may also perform this role. e nancial manager develops the project cost and budget management methodology, captures nancials at the portfolio level, and tracks variances as part of the change control process. Figure 2 The Roles In The Next-Generation PMO Flexible, Lean Frameworks Are Crucial e most visible dierence between traditional and next-generation PMOs is that next-generation PMOs operate based on the understanding that there is no one best way to do things and that strict adherence to a monolithic framework is the fastest way to become a bottleneck, not a change agent. Next-generation PMOs exist to facilitate and to remove barriers, not to drown their stakeholders in methodology (see Figure 3). When operating a next-generation PMO, its important to: Source: Forrester Research, Inc. 55456 - Dlrect project and portfollo strategy for the organlzatlon - Dlrect work and demand methodology for the portfollo(s) - Dlrect development and lmplementatlon of tralnlng - Dlrect change control process - Manage portfollos of pro[ects and the relatlonshlps wlth pro[ect managers for cross-LO8 or enterprlse pro[ects - Track project performance and project costs - Can dlrect tralnlng for the project organlzatlon - Develop pro[ect cost and budget management methodology - Capture nanclals at the portfollo level - Track varlances and part of the change control process - Manage portfollos, lncludlng resource forecastlng at the portfollo level - Handle reportlng - Pacllltate pro[ect lnltlatlon and governance or steerlng commlttee meetlngs - Manage tools and handle reportlng - Program reportlng as needed - Handle resource reposltory Dlrector of PMO Flnanclal manager(s) Portfollo managers Program manager(s) Admlnlstratlon Role Responsibilities 2009, Forrester Research, Inc. Reproduction Prohibited October 16, 2009 Making The Case For The Next-Generation PMO For Application Development & Program Management Professionals 7 Leverage expertise and historical data to build a pragmatic framework. Processes and frameworks need a sliding scale when it comes to rigor. Maintenance and operational or service requests oen turn around requirements that are much shorter than those for new projects; therefore, its important to emphasize gathering just enough information and providing just enough guidance to deliver the dierent types of work. Yes, we have to provide support for greater demand, but we cant make everything t into a project framework. Weve tackled this by having dierent roles to manage work. We have project administrators who handle work requests that are 500 hours or less; they may be managing several of these types of activities at once, but these are for break/x, maintenance, or service requests that dont require the rigor a larger project does. (IT director, nancial services organization) Realize that governance does not mean overwhelm them with paperwork and templates. e next-generation PMO provides useful guidance and methodology delivered in a way that allows project teams to focus on delivery, not forms. While certain policies, such as those regarding variance metrics, customer satisfaction, cost, and resource constraints, are necessary, the PMO cannot dictate every move a project team makes. e PMO should develop useful, delivery-focused processes and tools that provide guidance; its focus should be on removing barriers and upholding transparency. 11 Focus on the macro level and let the project managers sweat the small stu. PMOs must let project managers do what they do best: manage projects. Portfolio managers may own the portfolio and part of the relationship with the project sponsors, but the project managers own the delivery of the project. Next-generation PMOs focus on relationships and dependencies at the portfolio level and let the project manager select how he manages the project and the steps necessary for the team to be successful. One PMO director at a global nancial services company recounted: We have learned the hard way that too much methodology is as bad as no methodology at all. We learned that once project managers have some experience and adequate training, [we should] let them go and manage the project. 2009, Forrester Research, Inc. Reproduction Prohibited October 16, 2009 Making The Case For The Next-Generation PMO For Application Development & Program Management Professionals 8 Figure 3 The Next-Generation PMO Framework IS YOUR COMPANY READY FOR A NEXTGENERATION PMO? One of the most telling ways to know if your organization is ready for a next-generation PMO is to evaluate its project management maturity level. If your organization doesnt have dedicated project managers or they are inwardly focused, odds are youre not ready for the next-generation PMO. If processes are poorly dened or hinge on tribal knowledge, youre not there yet, but you can begin to put the processes in place. Organizational Models Are Important Companies without a PMO have to start somewhere. For those that have a PMO in place, it is time to look outward at serving the enterprise rather than focusing on specic duties and functions. Getting to the point where you can start building a next-generation PMO is evolutionary: You need to start with standardization and then expand your model as maturity and commitment grow (see Figure 4). Each PMO organizational model has both benets and dangers to avoid: Centralized PMOs focus on standards and building foundations. e word centralized is a bit of a misnomer because these PMOs are usually centralized in one department or division of an organization and tend to be the most inward-looking of the PMOs. ey are good for immature Source: Forrester Research, Inc. 55456 Demand Work type Program Project Operational Maintenance Service Governance Portfolio alignment Enterprise architecture alignment Process alignment Communication strategies Risk measures Tools Process guidelines Tool templates Communication strategies Risk measures PMO presence Communities of practices Guidance/consulting Feedback loops Metric guidance PMO framework 2009, Forrester Research, Inc. Reproduction Prohibited October 16, 2009 Making The Case For The Next-Generation PMO For Application Development & Program Management Professionals 9 organizations looking to get started with a PMO because they are the fastest way to implement standards and kick o training. e danger, however, is that they can become monolithic and slow moving. If the organizations abilities outpace those of the PMO, the PMO can become obsolete. Federated PMOs take the disciplines of the PMO to the next level. Once project and portfolio standards are in place and those practices and disciplines are commonly used, an organization can adopt more-mature practices. e federated PMO organization is composed of a strong central PMO and smaller PMOs that reside within specic lines of business (LOBs). ose smaller PMOs are dedicated to managing projects related to the individual lines of business. Federated PMO organizations enable organizations to become more agile in delivering what the business needs while retaining key best practices by maintaining a strong relationship with the centralized enterprise PMO. Next-generation practices can nd a home here, provided that the LOB PMOs have a healthy level of autonomy. Matrixed PMOs are autonomous yet disciplined. ese PMOs are similar in structure to a federated PMO; however, they are more loosely coupled. Matrixed PMOs work best in mature, project-based organizations where a portfolio approach is the norm and work is routinely organized into releases. Next-generation PMOs can ourish in this environment, as matrixed PMOs tend to promote autonomy and focus on strategic reporting. Latticed PMOs promote autonomy and agility but require the greatest discipline. In e Future of Management, Gary Hamel talks about lattice organizations, which are product- focused, innovation-driven organizations where traditional hierarchies are obsolete. Latticed PMOs, while rare, are the ultimate in autonomous organizations: ey create and implement the best processes to deliver a set of products and services to the organization. To the untrained eye, latticed PMOs can appear completely distributed but in reality are focused on organizational strategy and innovation. 12 2009, Forrester Research, Inc. Reproduction Prohibited October 16, 2009 Making The Case For The Next-Generation PMO For Application Development & Program Management Professionals 10 Figure 4 Organizational Models For PMOs Preparation Is Critical Extending the role of the PMO will require gradual but signicant changes within IT and business organizations. Companies ready to take the next steps must: Sta the PMO with experienced, open-minded individuals committed to the team concept. Ask anyone who has ever worked for a successful PMO about the dierence between that PMO and an unsuccessful one, and they are likely to respond that the key success factor was having Source: Forrester Research, Inc. 55456 PMO type Characteristics Dangers - Lstabllshment of process ls faster. - Vlslblllty ls faster because of the centrallzed process. - Good for organlzatlons that are lmmature, provlded that the PMO ls centrallzed ln one area (e.g., |T) - Lstabllshes vlslblllty lnto pro[ect management as a buslness process - |solated from LOB - Monollthlc structures can be seen as bureaucratlc. - Lacks aglllty - Analysls paralysls and slow to drlve process changes lnto the LOBs - Lstabllshes closer relatlonshlps wlth LOBs - Vlslblllty ls stlll fast because of centrallzed drlvers. - Lstabllshment of process ls stlll fast, though not as fast as ln a centrallzed PMO. - Clear establlshment of a pro[ect-based organlzatlon - |solatlon from LO8 less than the centrallzed model, but the PMO ln thls model ls somewhat separated from the LOB. - Less aglle than Matrlx but more than centrallzed - Tools play a crltlcal role, no toollng means compromlsed vlslblllty - Lstabllshes the closest relatlonshlps wlth LOBs - Works best ln a mature, pro[ect-based organlzatlon - Aglle processes are present and used frequently. - Often product-drlven - A strong matrlx relatlonshlp ls crltlcal, wlthout lt, the LPMO can be reduced to a gurehead and seen as admlnlstratlve. - Tools play a crltlcal role, no toollng means compromlsed vlslblllty. - There ls an LPMO ln place to establlsh governance and manage reportlng, but there are few hlerarchles ln place. Thls model looks almost decentrallzed. - The PMO ls completely allgned wlth the LO8 and lnvolved wlth technology drlven by both LO8 |T and buslness. - Commltment to dlsclpllned, Lean, and Aglle approaches but nexlble regardlng other optlons - Wlthout mature and hlghly supported pro[ect management practlces ln place, chaos relgns. - Lxecutlve management must support pro[ect-based organlzatlons. Federated Matrixed Latticed Centralized 2009, Forrester Research, Inc. Reproduction Prohibited October 16, 2009 Making The Case For The Next-Generation PMO For Application Development & Program Management Professionals 11 the right people with the right attitude and the experience to drive change. PMO leaders have to play multiple roles in selling and running a thriving organization: Leaders are part teacher, part parent, part cheerleader, and part principal. However, they are not part trac cop or dictator. Successful PMO leaders teach the benets of portfolio-driven delivery, collaborative project management, and strong team dynamics. e rst thing I did was approach the quality assurance and business analysts to get them on board with what we needed to do be successful . . . We developed processes to help trim away what wasnt necessary and ultimately provided fast tracks to help project teams deliver projects faster. We had a goal to show value in 18 months max, and we really wanted to show it in 12. Our business side used to avoid the PMO and go to the IT partners themselves; now they come to us because they know we can deliver it fast and deliver it right. (PMO director, global auto rental company) Set expectations about the next-generation PMOs role in the organization. Companies should expect some resistance to the PMOs expanded footprint, especially in terms of demand and resource management. It is not unusual for departmental managers to interpret this as a loss of control in determining their employees work. Executives and the PMO leadership must communicate that by providing greater visibility into the process, managers are actually gaining additional control in determining what should be worked on and how their budgets are being directed. Provide role-appropriate training for stakeholders, especially on the business side. Part of the transition from traditional to next-generation PMOs includes training to teach project managers and stakeholders alike to think of the PMO as a strategic support oce for continual delivery. is means that more stakeholders must get involved with training ranging from formal and informal project training, stakeholder responsibilities, and self-team management to tools training to enable more-ecient collaboration and project information analysis. Prepare for continual communication. Sustained support for transitioning to more-Agile PMO practices necessitates continual information sharing. Gather feedback about what works and doesnt work in current practices as well as feedback about the recent changes. Oer education and status sessions frequently so that stakeholders and sponsors see the transitions context and changes impact. Reporting portfolio status, demand, resources forecasts, and utilization as well as process improvement metrics to the appropriate roles in the organization removes the mystery around how the PMO supports the organization. 2009, Forrester Research, Inc. Reproduction Prohibited October 16, 2009 Making The Case For The Next-Generation PMO For Application Development & Program Management Professionals 12 R E C O M M E N D AT I O N S HOW TO BUILD A NEXTGENERATION PMO Building a next-generation PMO doesnt require an organization to abandon everything that has worked for it in the past, but it does require taking a new look at what the PMO can do to promote eciency and innovation. To build a next-generation PMO, organizations must: Build in exibility by keeping whats necessary and stripping away whats not. This applies to project management rst, as a foundation, and then to other forms of work. Flexibility implies development of a sliding scale for rigor in assessing dierent work types, practices that are adaptable, and the opportunity to select dierent approaches. Lower the threshold on what constitutes a project and how you measure a project. But do not raise the bar on all aspects of assessment and management rigor. Requiring greater visibility into demand and cost capture will provide necessary insight into actual spend, but organizations must be careful not to create barriers by demanding too granular a view. Open the door to broader work types by addressing the accidental project manager. Organizations routinely hand projects to resources who arent formally trained. The fastest way to drive adoption of project management disciplines is to provide support to those resources, oering guidance without being rigid and coaching without unnecessary rigor. Provide tools such as collaboration tools that can act as lightweight project management tools, templates, and training that occasional project managers can use even if they dont have formal training or certication. No PMO? Start now. Already have one? Find the PMO model to take you to the next level. Organizations must realize that every type of work that they perform has an impact on business strategy and ultimately on projects needed to reach strategic objectives. Leverage PMO disciplines to capture demand and resource data for all work so your organization can realistically analyze the performance of both casual and formal projects. This enables the PMO to assess performance and take the necessary steps to provide guidance and training. As practices mature, having this data will support the decision to move to a more distributed model to support LOB projects while allowing IT to provide the right mix of new delivery and support to deliver requisite business value. 2009, Forrester Research, Inc. Reproduction Prohibited October 16, 2009 Making The Case For The Next-Generation PMO For Application Development & Program Management Professionals 13 ENDNOTES 1 Forrester uses the following company size segmentations within the SMB market: very small business (2 to 5 employees), small business (6 to 99 employees), medium-size business (100 to 999 employees), medium- small business (100 to 499 employees), and medium-large business (500 to 999 employees). Source: Enterprise And SMB Soware Survey, North America And Europe, Q4 2008. 2 Capturing total spend is a dicult prospect, and if its done without implementing the right practices for repeated capture and measurement, it becomes an exercise in a vacuum. To put the right practices in place, see the September 20, 2007, IT MOOSE Management 20 Best Practices report. 3 Business is pushing to have greater involvement in technology investments. It wants lower-cost solutions, lower risk, and greater control. IT has to keep up or fall behind. See the July 17, 2009, Priorities Shi As Business Grip On Technology Tightens report. 4 Low-performing PMOs tend to have less executive support, lack steering committee support, and last only approximately 3.5 years before being disbanded. Source: e State of the PMO 2007, 2008, e Center for Business Practices, 2007. 5 Expanding portfolio views and consolidating demand enables organizations to understand and control spending and resource utilization, placing resources where they will deliver the most value to the business. See the January 14, 2009, Four Steps To Optimize Your Application And Project Portfolios In Volatile Economic Times report. 6 Business-focused PMOs take a broader approach to managing projects that span the requirements of a business organization. Source: Mark Price Perry, Business Driven PMO Setup, J Ross Publishing, 2009. 7 Companies are accelerating their requirements for funding but now must also include dependency management and benets realization as part of their measurement process. Taking a program management approach that plans and accounts for the relationships among multiple projects in pursuit of corporate goals is a critical step in that process. See the April 30, 2009, Programs, Not Projects, Deliver Business Value report. 8 A successful project management framework takes the practices from multiple methodologies and strips away what is unnecessary. Strict adherence to one set of rules prevents managers from adapting to situations that may require broader thinking. See the January 22, 2009, PMBOK And Agile: Friends Or Foes? report. 9 As IT continues to move forward to be part of the integral business technology process, IT is addressing next-generation concerns. Along with the PMO and the project manager, IT as a whole is moving to the next generation which also means that enterprise architecture has to integrate its methods more eciently. See the June 30, 2009, Next-Generation IT Requires Next-Generation EA report. 10 By focusing transparency on just demand for new projects and systems and then lumping everything else into the operational or maintenance bucket, IT organizations miss opportunities to optimize their portfolios to gain the most value. See the January 14, 2009, Four Steps To Optimize Your Application And Project Portfolios In Volatile Economic Times report. 2009, Forrester Research, Inc. Reproduction Prohibited October 16, 2009 Making The Case For The Next-Generation PMO For Application Development & Program Management Professionals 14 11 Project managers who are forced to use templates that have little meaning to the situational reality of the project they are working on will be less productive, their team will be frustrated, and their project will become challenged. Finding situationally appropriate templates enables teams to work eciently with little overhead. See the March 20, 2009, Are Your Project Teams Living In Template Hell? report. 12 Management by innovation requires that organizations abandon preconceived notions of management and bureaucracy to focus on removing barriers that prevent organizations from trying new practices that can help them get ahead. Source: Gary Hamel and Bill Breen, e Future of Management, Harvard Business School Publishing, 2007. Forrester Research, Inc. 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