Over the last month I have spoken with more than 25 enterprise organizations in the US and Europe, and for many of these organizations there is a fundamental transition taking place – these companies are moving their focus from simply cutting costs out the business to innovation for value. For instance a financial organization in Europe has moved their attention from large banking applications to the rapid development of mobility applications for their business and retail customers. A manufacturing organization has transitioned from investing in their ERP platform to using these resources to help the company deliver more innovative technical value adds to their products. In both cases, the mantra in their project world has moved from perfection to the attitude of succeed or fail quickly! To meet these o in short delivery of smaller, more regular deliveries of functionality that can be used to determine if the innovation meets expectations allowing for termination earlier in the cycle when the innovation doesn’t meet expectations, the notion of “failing quickly, to focus on success”.
These recent meetings have confirmed that the focus of the project management office in many organizations has already transitioned from focusing on long running projects or programs of work to delivering short sharp capabilities that deliver business value.
When I discussed this change with the VP of Strategy from a large financial organization, she mentioned to me that the business is demanding rapid incremental value to ensure their products and services can meet or leapfrog the competition. Now this rapid cadence of change doesn’t remove the requirement for accountability and transparency, it simply demands that rather than IT getting requirements and hiding in the back room for a year, IT must be transparent and frequently develop and deliver capabilities with the business.
No open checkbook!
Many think that the move to a more “agile” focus allows for an open checkbook. With more smaller investment cycles, the perception is that this may often mean that rigorous approval cycles for larger investments can be avoided as the smaller approvals are delegated to a lower level. A fundamental driver of the accelerated cadence must be transparency and management against value with the ability to terminate an investment when it goes south before incurring a significant expense – which has for some time been a failing of IT. If you consider the development costs of an initiative represent a maximum of 20% of the lifetime cost of ownership, a good decision in development can deliver real long term business value.
Manage the portfolio
With a larger number of individual projects in flight, the linkage to the overall portfolio is still a critical management activity. The opportunity to drive multiple individual investments without discipline could lead to anarchy, so to avoid this, the linkage to organizational value and direction should be monitored at the management level. The objective of management remains the same -whether using an Agile or Waterfall approach – the success of the overall portfolio of investments and the stewardship of the assets provided to deliver business value.
Despite the accelerated rate of demand of the business and the evolution of tools to support the adoption of Agile practices, “Agile is not a cure-all, the silver bullet or the solution to everything, but it helps,” was the comment I heard in the UK two weeks ago. This has also been reinforced with my discussions with organizations across North America. Additionally, during a conversation that I had with another organization in Europe, they suggested that Waterfall is still relevant, depending on the nature of the investment, its delivery cadence, requirements, skills, complexity and business ability to absorb agile methodologies. Personally, I believe that given the nimble expectations of business it’s a matter of time before agile is the predominant methodology.
Methodology is not the question, judging value is
If I have to identify the major change today, it is the focus on the business value associated with IT enabled business investments vs. Project Management Office (PM) value. This is a fundamental change, and for your traditional PMO it can be a scary series of metrics. For example, past PMO metrics such as on-time, on-budget, and so on will no longer be your key metrics. (I will address the new world of metrics in a blog in the near future).
Is the PMO as we know it dead?
Well not quite! The role of the PMO is transitioning and if you are a Project Manager you remain a valuable resource. However, in the future you may find yourself coaching and refining process against managing long running projects with the role being within the business not IT. One thing is for sure, your role like many of those in IT is transforming, are you ready?
Article source: CA PPM Blog