The new normal. The next normal. The return. Coronavirus has shown us a lot about what is needed to survive and then thrive in uncertain times, but smart companies are recognising that how they manage the investment project slate will be the vital arbiter for success on the other side of COVID-19. Michael Knapp explores the role EPMO will have to play

SARS-CoV-2 and the disease it spreads, COVID-19, has shown us many things about society, business and each of us as individuals, but none more critical than how to survive and then thrive during times of great uncertainty.

Whereas some organisations have seen their markets and ways of operating decimated (such as hospitality, tourism and retail), other businesses such as healthcare, online retail, and home delivery have blossomed. Others have pivoted their product range to meet the exponential growth in demand, such as for PPE. No one has been spared the impacts of the changes being wrought, and the reality is there will be long-term winners and losers.

To some CV-19 is an existential threat, yet the challenge is understanding much more than what we need to do to survive. We also need to know how to transform and grow in a radically different social and business environment. And as organisations pivot to new products, new markets and new ways of doing business, the somewhat ‘hit-and-miss’ approach to realising return on project investments won’t cut it.

According to the PMI, Gartner, KPMG and PwC (amongst others), just 60% of organisational projects are rated a success, but only half that number actually measure success (and failure). Probably most worrying, just 40% of organisations are confident their portfolio of projects align with strategic and other plans.

If such poor performance was accepted before CV-19, in a post-CV19 world it will spell disaster for organisations determined to transform. For some, smart, organisations, CV-19 is not sounding the death-knell of their businesses, rather it represents the opportunity to step up and radically change how they structure and deliver their portfolios. Those organisations will have optimised their returns on their total project investments.

So, What’s the Problem?

Research shows us that organisations which underdeliver on their portfolios have an inefficient, or non-existent, process to lead from strategy formulation to strategy realisation. That is, they have no way of ensuring that their goals, whether short, medium or long term, are being effectively delivered via the projects and programs they choose to run.

It’s as if transmogrification is at play, that many projects simply happen by someone packaging an attractive business case and, with the right amount of lobbying, flattery and outright coercion, obtain funding and so the starting gun is fired. Of course, this over-simplifies what often happens, but for many poor performing organisations, there are no well-defined, efficient and universally followed processes by which the portfolio is built – it seems to grow organically, like a blind man assembling a dry stone wall. It’s unlikely to stand for long or be very useful.

Organisational culture and people issues cannot be ignored in understanding why project portfolio management is not done well. Poor performing organisations are characterised by risk aversion, procedural inflexibility and a culture of blame, often witnessed by senior managers only taking detailed interest in projects when things go wrong. In many cases the way forward is defined by what was done in the past, that precedence is a good and safe reason to repeat the process, that attempts to change process is met with “That’s not how we do it around here”, or worse still, “If it ain’t broke don’t fix it”, which shows not only resistance to change but also ignorance of what ‘broke’ looks like.

It’s universally accepted that successful and efficient businesses know how to use technology. Their systems are well-designed and well-integrated, broadly meeting the operational, management and strategic needs of the organisation.

Unfortunately, this does not describe the technology supporting many, if not most, EPMOs. Traditionally, EPMOs use ‘tools’, such as those supplied by Microsoft, Computer Associates and Atlassian. It’s not uncommon to find upwards of a dozen ‘tools’ to support portfolio, program and project planning, estimation, tracking, reporting, risk and issues management and change control. It’s often the case these tools don’t talk to each other, forcing the EPMO to patch them together using, typically, Excel. This sees critical project portfolio data spread across single-user spreadsheets and a dozen tools, defying any claim to good information management.

This means portfolio information is hidden, non-existent or so far in the past as to be useless or, more ominously, misleading.

Project Portfolio Management as a Strategy

To have a chance of realising strategic and other plans, organisations must have a well-defined portfolio management process, a process that explicitly links goals and objectives to a smartly designed framework of programs and projects, optimised to ensure efficient execution and delivering maximum value.

A well-structured project portfolio is a thing of beauty as it can be ‘read’ to see clearly the organisation’s strategies and working back from that, their strategic plan. For many (if not most) organisations however, the portfolio is often little more than a few spread sheets and accompanying high level project briefing documents. There is little analysis which explicitly demonstrates that the plan, as defined and agreed, will actually be delivered.

Further, such loose planning procedures often couple with inefficient execution and delivery methods, further eroding any chance of realising the strategic plan. If you haven’t portfolio planning nailed, then you may well wonder if your competition has. Possibly but not probably, as only around 30% of organisations have good portfolio management methods. Most places could be termed, euphemistically, ‘sub-optimal’.

In this sense good portfolio management should be viewed as a competitive advantage, a strategy to succeed.

Interestingly, it takes less effort to do portfolio management well rather than not do it, or not do it well. At the process level, portfolio management is comprised of 3 core processes:

It’s probably obvious what each process does, but what isn’t so obvious is who does this? Which functions, organisational units and people make portfolio management happen? Possibly surprisingly, the group most involved is the EPMO, albeit a transformed one, termed Enterprise Portfolio Services.

Wait. What?

The traditional EPMO is often seen as having a compliance and policeman role, making sure boxes are checked, standards are followed and no one in project land is breaking too many rules.

This is unsurprising considering the PMO grew out of the quality management movement going back 40 years. They are often seen as one would a regulator, someone to keep onside but otherwise not providing a lot of value. To many, the EPMO sets hurdles to be jumped over, and their engagement is often seen as counterproductive, which is little harsh, as the EPMO often plays a critical role in ensuring governance standards are in place and followed. They have a role to play in blowing the whistle of projects going rogue, or managers who are gaming the system.

But this simply enhances their reputation of ‘project cop’, leading to push back and deliberate obfuscation by project managers (and sponsors). Without goodwill and careful management, the situation can digress and take up residence as a confrontational dynamic.

The transformed EPMO, called Enterprise Portfolio Services (EPS), indicates its purpose and its value by its name. Its focus is very much on portfolio management, driving portfolio planning and optimisation, and providing useful information and oversight of portfolio delivery. At its core, EPS is a service-based organisation, understanding its key stakeholders’ needs and providing services and support to ensure their role in taking strategy to delivery is realised.

This is a very different role to the ‘command-and-control’ traditional EPMO. Box ticking has been replaced with understanding and meeting stakeholders’ needs and expectations. Reacting to events gives way to anticipating change and being ahead of the curve. It’s a cultural change as much as an organisational one. A different mindset. A home for servant-leadership.

So How do we Transform our EPMO?

It’s simplistic – and wrong – to state by transforming your EPMO you solve all your project portfolio problems; that you’ll end up running the right portfolio of projects and optimise your return on project investments. To achieve this outcome, you’ll need to mount and run a transformation initiative, focused on the EPMO but having much broader scope of change than just this group.

It’s useful to describe this transformation across three dimensions of People and Culture, Process and Frameworks, and Technology, as summarised in the following table:

Dimension

From

To

People and Culture
  • Risk-averse
  • Reactive
  • Procedural
  • Inward focused
  • Risk-aware
  • Service-oriented
  • Adaptable
  • Outcome focused
Processes and Frameworks
  • Project centric
  • Inflexible
  • Complex and cumbersome
  • Integrated Portfolio-Program-Project Framework
  • Flexible and adaptable
  • Comprehensible and easy to use
Technology
  • Discrete, standalone tools
  • Disparate and replicated data
  • Poorly integrated
  • Unable to support accurate decision making
  • Integrated Portfolio Management System

People and Culture

To paraphrase Einstein – you can’t solve problems by using the same thinking which caused them in the first place.

To transform your EPMO to an Enterprise Portfolio Services group, you need different thinking. Teams need to be empowered to try new things and make mistakes in finding the best way to achieve the right outcomes. No major change initiative will work without a senior, and enthusiastic, champion, someone who works to create a vision which is owned and delivered.

Interestingly, the transformed EPS typically requires fewer, but more highly skilled, personnel than the old EPMO. This team is very much outward-looking, working closely with senior managers and divisional PMOs in crafting the right portfolio, then providing expert analysis and advice on how portfolio performs.

Gone are the ‘box-tickers’ and ‘paper shufflers’, replaced by smart professionals adapt at agile ways of working and design thinking. Despite all this change, the need to ensure good governance and compliance is not diminished, it’s simply executed in a more efficient manner.

Rather than a refuge for ‘journeymen’, EPS becomes a group the best and brightest aspire to as this is where so much of the smart thinking required for organisational success takes place.

Process and Frameworks

EPMOs are often the custodians of a myriad of processes, procedures, methodologies and frameworks, which over time grow and become way too complex and complicated. The act of following them is seen as a major overhead delivering dubious pay-back. The EPS will define and manage agile and adaptable frameworks and guides, with a focus on ease of use and practicality.

Of critical importance is the Portfolio Management Framework, which provides good practices and guides for each stakeholder group involved in portfolio planning, optimisation and delivery. Further, recognising their role to support all involved parties, EPS will offer on-the-job support.

Technology

The disparate mishmash of tools, spreadsheets and PowerPoint decks need to be swept away and replaced by a well-designed and fit-for-purpose Portfolio Management System (PMS), capable of supporting the needs of all stakeholders, and across projects, programs and portfolios.

Rather than have critical project and portfolio data spread across too many data repositories, the new technology will support a single ‘source of truth’, and provide intelligence and ‘smarts’ which not only accurately report current portfolio status, but provide the necessary analysis to make sense of data. The system should be able to look down the track and advise on performance, productivity, risks, issues, resource utilisation and demand and financial analysis. This information will be available across a range of platforms continuously and accurately.

Without good information and knowledge management, the significant benefits to be derived from the transformed EPMO will be reduced. Fundamentally, and most importantly, the PMS will support fast and accurate decision making.

What’s Next?

Transforming your EPMO to a contemporary Enterprise Portfolio Services group is not simply a ‘good idea’, it should be seen as a mandatory change initiative necessary to position the organisation to be best placed to thrive in a post-Covid19 world. The benefits of such a transformation are significant and measurable, and inaction should be seen as unacceptable.

To move forward, then, undertake the following steps:

  1. Baseline your current operation. Undertake an EPMO Capability (or maturity) review to see how well you stack up against the best
  2. Out of the review prioritise what needs to change, and the target end state for the transformed EPMO
  3. Package together a high-level proposal, making the case why transforming the EPMO is a smart, necessary move, and sell the proposal to the key decision makers, such as occupants of the C-suite and other influencers
  4. At this point the organisation may move forward along several pathways depending on the agreed scope of change. Regardless, the important thing is to move forward and begin the transformation

Michael Knapp is an experienced organisation transformation leader, working in senior roles with a number of highly successful organisations as they transform their people, systems, structures, technology and processes to better achieve their strategic outcomes. He has extensive experience working with senior executives in solving critical problems and optimising outcomes from their project and program investments. He is also the author of Enterprise Portfolio Governance: How Organisations Optimise Value From Their Project Portfolios

As project specialists, we develop fit-for-purpose strategy and PMOs.  Contact us here to find out more about how we work with your teams or call 02 9098 6300.

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Quay Consulting is a professional services business specialising in the project landscape, transforming strategy into fit-for-purpose delivery. Meet our team ...