What would be your response if the CFO — or, better yet, the CEO — asked if you could help him or her get control of all the projects and programs in which the organisation was investing or wished to invest?
Not just IT projects and programs, but everything that was being done.
Most of us would answer, "Of course — anything you want," and then potentially find ourselves in trouble when it later became clear that our interpretation of "control of projects and programs" wasn't in the same universe, let alone on the same planet, as what the executive team really wanted.
On the flip side, you might be the one who has identified that there are serious disconnections between the different business units that are working on what is supposed to be a single program. Would it make sense for you to approach the CFO or the CEO and propose some sort of oversight organisation at the enterprise level?
If either of these two situations describes yours, you aren't alone. With the continued uncertainty in economic conditions, Gartner has seen a steady increase in the number of clients asking about setting up what we call an "enterprise portfolio or enterprise program management office" (EPMO).
This is a dedicated staff function to help oversee the investment in projects or programs as a way of creating enterprise value.
These inquiries have come from organisations of every size and shape, and, to our surprise, at all levels of program and portfolio management maturity.
It turns out that maturity isn't a threshold condition for the formation of an EPMO. It is directly related to the mind-set and operating practices of the organisation itself. Here's what we've found:
1. Strongly operationally-focused organisations do not lend themselves well to the formation of EPMOs
Organisations in what we call "stable market conditions", which, up until now, included most government agencies, tend to naturally focus on running the business and doing what they do well. To put it bluntly, from their perspective, the EPMO is a solution in search of a problem.
In this case, spend your time and effort on building a good track record of project success, rather than attempting to convince the organisation to install an EPMO. In an environment of uncertainty, this is a capability that any company would be happy to have.
2. For organisations that focus primarily on continuous improvement, build a project capability office instead of an EPMO
Even in today's economy there are still organisations that have a good stream of revenue still coming in from current products and services. In this case while management is committed to operational excellence and business process improvement they aren't interested in investing in anything new or different.
In this environment we've found that organisations generally resonate with the idea of establishing what Gartner calls a project capability office (PCO) instead of an EPMO. The primary focus of a PCO is to establish an enterprise wide capability in project management.
To paraphrase a comment we heard from one CEO "I have a lot of projects going on throughout my company. I can't afford to worry about how reliably they are going to get done."
3. For survival-induced change, focus on portfolio management
Whereas the organisations above are doing well enough to only need small improvements in today's economic environment there are others that are struggling with the very viability of their current business model. It's a situation even some government agencies are facing based on decreasing tax revenue and increasing debt payments.
The first step we recommend in this situation is to launch what one client called "project tourniquet": wherein you stop the bleeding first, and then worry about how to improve your way back to health.
The second step would be to set up an EPMO focused on portfolio management to help ensure that any funds that are being invested are being invested in the right things. After all money invested in the wrong thing never produces a return no matter how well run the project might be.
4. For strategy-induced change, go ahead with an EPMO
If your organisation is focused on market leadership or going from good to great and the change you face comes from strategy not external factors, then an EPMO focusing on strategic tactics, change management, communication and program execution in addition to the portfolio makes sense.
Organisations that want to drive internal change in order to be the best in new markets and with new services will find that close the strategy execution gap through the use of an EPMO gives them exactly the competitive edge they need to succeed.
5. It's all about readiness
Gartner estimates that only about 20 percent to 30 percent of organisations will ever end up forming an EPMO because of readiness and rightness issues.
It's important to understand what is right for your organisation and then tailor your PPM capabilities to support its unique needs.
Donna Fitzgerald is the role service director for Gartner's program and portfolio research.
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