Over the past few months, we have been interviewing project management office (PMO) professionals and asking them about how they operate their enterprise portfolio management offices at their respective organizations. Through our research, we have found that the term “PMO” comes with a negative connotation among business leaders because of its linkage with bureaucracy, lack of transparency, and department siloing.
Traditional PMOs are often seen as gatekeepers that slow down time to deliver value. Some of the challenges that they face are:
- Increased team autonomy already forces IT PMOs to embrace modern practices. Agile development and delivery practices are now part of the mainstream. Leaders report that having autonomous teams is a high priority in their organization.
- Business PMOs have their own set of priorities and struggle to align with tech PMOs. Without portfolio transparency, business/IT partnership falters, reinforcing silos that impact alignment with IT PMOs.
- Executives continue to struggle with how to connect strategy to delivery. Organizational structures and budgeting practices that keep departments siloed prevent firms transitioning from annual project-oriented funding to value stream-driven product planning. In this situation, PMOs play a limited role in facilitating value-based prioritization practices, emphasizing budget consumption over delivering successful outcomes.
To ensure that value is being delivered, enterprises are adopting new monikers such as ESVO (enterprise strategic value office), and IT PMOs are transitioning to IT SVO (strategic value office).
These organizations have a mission to enable adaptable practices, implement planning technology, and establish performance measures to support an ecosystem that delivers successful outcomes by driving focus on value selection, optimized planning, analysis, and performance measures.
To become more future fit, consider establishing an operating model that identifies and supports the necessary roles, practices, and governance required to deliver value for customers. Two key points to remember when building your SVO operating model are to:
- Identify internal and external customers to deliver the best value. Customers are at the center of every firm investment. Instead of focusing on methods and superficial compliance reporting, SVOs seek to understand the needs of external and internal customers and use that knowledge to optimize planning and delivery practices to serve their customers.
- Design services that deliver successful outcomes to their customers. Customer journeys help companies identify offerings, experience, and the value proposition they provide to the customer. From an SVO perspective, this provides the foundation for how the office provides support for planning and delivery — i.e., how investments are prioritized (journey), practice support (offering), value realization via good governance, and automation, all while providing a positive experience.
To find out more about how to build an effective SVO operating model, please read Forrester’s new report, Adaptability And Value Delivery Are Key Elements For Strategic Value Offices In 2023 And Beyond, which highlights four more key things to remember when building your SVO operating model.
Be sure to read the report, stay tuned for upcoming research on SVOs, and schedule an inquiry or guidance session on any of the topics in the report.