PMO in strategy implementation and benefits realisation

In collaboration with PMOGA India Hub, the IAPM organised a writing competition. Below you can read the article that was awarded first place. The author of the article is Kiran Kumar Sadi.
A person writes something in a notebook.
Before we start with the main topic, I would like to present some project management statistics that are important for the understanding:
 
  • 44% of projects fail due to a lack of alignment between business and project objectives. 
  • Projects are 2,5 times more successful when project management practices are implemented. 
  • Companies that invest in best project management practices reduce waste of financial resources by 28 times.

The Story

A multinational IT service provider faces a challenge in implementing a new customised software solution for one of its largest clients. The implementation will also involve the integration of external systems to achieve the business objectives. In addition, the programme will be an integral part of the company's value chain and is critical to the client's competitive advantage. Therefore, the associated risks are high on the part of both the IT service provider and the client.
 
The following strategic objectives and success factors are determined for the programme:
 
  • Maintaining high quality standards in every delivery with non-negotiable timelines. 
  • Maintaining the skewed onsite-offshore ratio of 10:90. 
  • Improving end-user acceptability of the system. 
  • Reducing the cost of ownership of the application. 
  • Reducing time-to-market and new product launch costs. 
  • Maintaining a healthy operating margin for the project. 

The key challenges are the following: 
 
  • Unsupportive vendors. 
  • Inexperienced team with a need for sudden ramp-up. 
  • Agile working.
  • A new environment with multiple locations. 
  • Strict quality standards for deliverables at each phase.  

The following innovations are devised by the organisation to face the challenges:
 
  • Being Agile – Multi-skilled onsite team, innovative tools for knowledge sharing. 
  • Appropriate quality at reduced cost - Techno-functional test team, development of reusable artefacts with automation of coding, automated test scripts/tools and configurable code development. 

The following methods are used to overcome the challenges: 
 
  • Excellent project management - critical delivery management with shared responsibility, shared resource strategy, quality standards and stakeholder identification.
  • Excellent communication management - communication matrix and balanced knowledge transfer sessions.  

Adopting and adhering to the above methods help the client achieve quantifiable benefits, such as:
 
  • Reduced implementation costs for the client by reducing unnecessary work due to incremental delivery. 
  • Effective cost management leads to a reduction in application development costs. 
  • Reduced errors in the system. 
  • High user acceptance. 
  • The client can launch the product on time for their end users.   

Benefits for the IT-service provider: 
 
  • The successful completion of the project helps the IT-service provider to win a similar implementation project with the same client. 
  • References at CEO level are generated from this project, which are used to sign contracts with other companies in different regions. 
  • The sustainable generation of revenue strengthens the finances of the IT-service provider.

From the story to the relevance of the PMO

The intention of narrating the story is to understand the background to the success of a project and the implementation of innovative and collaborative methods. In general, the strategy of any company is to build a strong portfolio in terms of projects, revenue, sustainability, increasing the number of clients and positioning at the top of the market. With a holistic approach, the defined process, best project management practices and performance can be improved, resulting in a win-win situation for all stakeholders. The PMO plays a supporting and guiding role to drive and adapt the defined processes and methods that are aligned with the strategies and goals of the organisation. 

When the PMO is established, the organisation is taken apart and the PMO is involved in setting the strategy. Strategic management is the process of assessing "what we are" and deciding and implementing "what we intend to be" and "how we are going to get there". A strategy describes how an organisation intends to compete given the resources available in the existing and perceived future environment.

Aligning projects with an organisation's strategic goals is critical to the success of any project. Today's business climate is one of rapid technological change, global competition, financial uncertainty and force majeure such as pandemics. Under these conditions, alignment between strategy and project is even more important for project success. 

Ensuring a close link between the strategic plan and projects is a challenging task that requires constant attention from top and middle management. The larger and more diverse an organisation is, the more difficult it is to establish and maintain a close link. Many organisations still have not developed a process that aligns project selection with the strategic plan. The result is poor use of organisational resources such as people, money, equipment and core competencies.

Project governance is critical to realising the company's strategies. It provides the project manager and his team with the framework for planning and managing the project so that the project is in line with the overall strategy, programmes and portfolio of the company (project governance). In addition, project governance helps to establish rules and decisions, define roles, tools for planning and executing the project, responsibilities and accountabilities of the project team and other participants for the success of the project tasks. 

A PMO contributes significantly to the success of projects and the strategy of the organisation by providing the governance framework as well as integrating and aligning projects with corporate strategies. A PMO supports the success also by assisting project teams in defining the criteria for project success, the acceptance criteria for delivery, the process for project communication and progress reporting, a process for review, etc.

The PMO thus fulfils several functions. These include, for example, the the project definition and planning, the cost-benefit analysis of projects, risk management, monitoring and control. A PMO is also responsible for providing experience and knowledge to SMEs, supporting project teams in implementing project management processes and procedures, collecting, disseminating and providing expertise and knowledge. Furthermore, a PMO is responsible for maintaining project tools, standards and procedures.
 
Consistency is what makes the average excellent

A critical factor in the success of integrating the strategic plan with the project lies in creating an open and transparent process that can be reviewed by all key stakeholders and by the management. 

The PMO has the role of a watchdog that ensures, that all projects and programmes in the organisation are aligned, followed and executed according to industry standards. 

As a control instance within the organisation, the PMO also keeps an eye on the organisation's implementation of best practices for excellence, it conducts project audits and training, and assesses project compliance. A PMO reports on project status and metrics related to quality, finance, project management maturity, risk, contract and business reviews, and also provides process templates, quality and resource management, and it organises audits. 

By consistently applying and adhering to the processes and methods, the PMO supports the project teams and the delivery teams throughout the life cycle. 

The benefits of the PMO can be realised by not losing sight of timely delivery and quality of deliverables during project execution. The maturity of the organisation's project management, effective management of resources, provision of expert services to the client and winning repeat business from the client also play an important role in running a PMO adequately.
A picture of Kiran Kumar Sadi.
Author: Kiran Kumar Sadi, PMO Project Coordinator at Pactera Technologies NA, Inc. (Pactera EDGE).

Key words: Project management, PMO

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