The Future of PMOs: Understanding the Challenges

The day Lydia Agnese started her new role as PMO manager at Northstar Travel Group, she received big news. "They told me we were switching from Waterfall to Agile — and I would be leading the transition," she says. "I went home to my husband and said, 'I'm gonna be busy.'"

Northstar Travel Group , a leading B2B information, business intelligence, commerce, and events platform serving the global travel and meetings industry, is growing fast. In 2017 alone, the Secaucus, New Jersey-based company made five high-profile acquisitions.

Managing big transitions is not easy, but it's not the only challenge PMO managers face. In the rapidly-changing business landscape, traditional PMOs have to find new footholds to stay relevant.

This has become especially clear as the COVID-19 pandemic continues. Companies are dealing with escalating competition and changing market dynamics, and more are adopting new project management methods to survive and thrive. PMO challenges have grown with projects becoming more complex and development teams increasingly strained.

"The traditional PMO is all about standards and consistency," says Michael Dougherty, National Project Manager at Magenic. "It focuses on command and control: Get your status report , meet our deadlines, follow our standard boundaries, here are the forms you do. Those same techniques don't necessarily fit into an iterative, fast-paced, highly competitive future PMO environment. Unfortunately, it hasn't evolved quickly enough to meet the needs of frequent releases and rapidly developing company strategy and direction."

The need to adapt quickly to change and the introduction of new technology leaves the future of the traditional, process-heavy command and control PMO uncertain.

"Many PMO leaders started as project managers and got promoted into the role of running a PMO, so there's a big emphasis on process, tools, templates, and steps because that's what they know," says Laura Barnard, PMP. She has a free online summit on how PMOs can provide impact. "Business leaders understand those things are necessary, but, at the end of the day, they just want to get stuff done, and trust investing in a PMO will be worth it. PMOs must shift their focus to driving strategy delivery in a way that generates a high return on investment for every project, every time.”

This article will cover several significant PMO challenges and trends and explore how PMOs can evolve to succeed in today’s business environment.

Trend #1: A Focus on Delivering Value

PMOs are often considered as a cost center that inhibits progress within the company. The PMO of the future must find ways to provide tangible, measurable value.

"PMOs fail because companies invest in them but don't see the expected business outcomes," Barnard says. "Part of the problem is PMOs have been focused on the wrong results. Project success shouldn't only be determined by whether the project was on time, on budget, and achieved its scope . That's not enough, especially not in the eyes of the business leaders. To them, project success is achieved when the expected business outcomes are achieved. As a PMO leader, if you are helping the business drive impact, you never have to worry about your job again."

One PMO challenge is that their processes are seen as overhead, according to a PM Solutions report . An inability to demonstrate added value is also among the top issues PMOs face.

How PMOs Can Provide Value

Take a holistic approach

Traditionally, PMOs focus on tools, templates, and processes. When they are faced with a task , they put all their attention into getting the project done within the parameters they're given. But for PMOs to succeed, they need to broaden their focus to ensure every project aligns with larger, overarching business goals.

"The PMO must evolve to provide a higher level of service to the business via a holistic view of the organization that is often missed by individual teams," Dougherty says. "It ensures the business's goals are met, and the project meets technical goals, and satisfies product management and solves problems better for the end-users."

Ask the right questions

Having a good understanding of a project's end goals is critical to delivering the most valuable outcome. Asking the right questions is the key. "PMOs need to solve business problems and address pain points," Barnard says. "What is the business case for doing this project? What business goals do we hope to achieve? How are we defining success?” Hint: It's not being defined by the triple constraint.

Having those answers in mind from the beginning will inform the way the project is built. For example, if the goal is to create a product with high adoption rates, PMOs need to bake usability testing into the project plan from the beginning. Asking what the business case is upfront will shift the way a project is executed.

Directly engage business units

Breaking the perception that PMOs are only driven by process and workflow compliance takes time, effort, and trust. Getting in the trenches and communicating with individual teams is one of the most effective ways to gain confidence and change old assumptions. This results in increased productivity, quicker alignment, and open communication.

"PMOs need to be building trust by asking 'How can we help you?' and following through on that," Dougherty says. "It's not about demanding they fill out the status report , or follow these steps, etc... It's about servant leadership at the program level and building relationships."

Package for profit

Tying PMOs directly to revenue generation efforts is one surefire way to showcase their value to the organization. Take project managers who are more business-savvy or have customer-facing experience and attach them to a client's bill as a value add.

"If we're working on a complex solution for a client, especially if there are dependencies or a third-party involved, somebody has to manage all of the pieces, so we charge them for our project manager's time as a value add service," says Bruce Garrod, Project Management Consultant at Solutions Management Inc.

"If you have 10 project managers on staff and they're each getting paid $100,000, then that's $1 million in internal costs. That might be a lot of overhead for you, but it's not a lot of billing to a couple of clients," he says.

Trend #2: An Increased Pace of Change

Traditional PMO structures don't fare well when business leaders are demanding to see results immediately. Agile methodologies are becoming more popular as companies fight to keep up with the pace of change and an increasingly competitive landscape. Taking two years to produce a project isn't going to cut it.

"The pace of change has increased so much that if you keep doing things the way you've been doing them, you won't survive," Barnard says. "PMOs have historically been a 'wait, collect data, wait some more' type of organization. That's not going to work anymore."

Business leaders expect to see results instantly. Producing an imperfect product and iterating over time is becoming the norm. "In a true Agile environment, you are developing your scope as you go," says Oliver Yarbrough, PMP, a PMO Trainer at Bobcat Academy.

"There is not as much documentation, not a lot of lessons learned, all of the processes have been downsized. Where is the space for an entity that needs control and oversight in this situation? That's the big question."

How PMOs Can Adapt to this Agile Environment

Be a change management expert

As organizations shift from traditional (such as Waterfall project management ) to Agile methodologies, they will need someone to usher through that (potentially painful) process. PMOs are uniquely situated to play that role. "Project managers and PMO leaders are well-positioned to transform anything in an organization. They know how to make change happen," Barnard says. "This is a great opportunity to take advantage of their inherent skill sets and lead the organization through change."

Business units that aren't used to Agile workflows and timelines may be initially uncomfortable with less predictable project management methodologies . Taking the time to catch them up to speed and explain what to expect provides a lot of value.

"One of the big values of a PMO is educating the rest of the organization and telling them, this is what's happening, this is why it's happening, and this is what it means for you," Garrod says. "PMOs need to have a good understanding of how the Agile environment is different from their current workflow, and go to all of the departments and say, 'You have a role to play.'"

Provide support at all levels

The ability to move fast, iterate, and course-correct quickly is paramount in an Agile environment. This means creating brand new processes, templates, and reporting for each new program or project is a momentum-killer. New tools and technology are also quickly taking over these manual processes.

PMOs will provide more value serving teams as expert facilitators — monitoring progress, checking in with teams regularly, and making sure projects run smoothly at all stages.

"In an Agile environment, you don't need to have the traditional command and control role a typical PMO has," Yarbrough says. "PMOs will continue to provide value as a facilitator, clearing the path for teams as they move forward on their goals. The more the PMO can do to remove roadblocks to team productivity, the better."

Additionally, PMOs will continue to serve as a valuable buffer between leadership and project teams , translating leadership's needs and wants while providing direction and support to project teams. "The reverse is also true," Yarbrough says. "PMOs will need to take the feedback they receive from the teams and translate it to senior leadership. The PMO will act as a champion for project teams."

Find the right tools

While adopting an Agile methodology and mindset may be foreign soil to some PMOs, they won't have to go at it alone. New technologies like automation and advanced reporting can help PMOs retrieve real-time insights for quicker decision-making.

"Needing to respond quickly is a way of life. CEOs aren't waiting a month to take a meeting and make a decision. They're sitting at the airport looking at data on their phone and making a decision on the fly," Barnard says. "PMO leaders need to figure out how to leverage automation and technology to get real-time information in the hands of decision-makers as quickly as possible to keep things moving forward."

UDN Task Manager Reports and Dashboards allow you to gain insights into project performance and identify roadblocks quickly. The best part? All task and project data is updated in real-time.

UDN Task Manager Reports and Dashboards allow you to quickly gain insights into project performance and identify roadblocks on the fly. The best part? All task and project data is real-time.

Trend #3: The Emergence of New Technology and Automation

New technologies like automation and AI are becoming more and more sophisticated. Some PMOs are (justifiably) concerned those same tools could take their jobs.

"Automation has the potential to eliminate any job that can be reduced to a predictable process," Yarbrough says. "We will see automation eat up a lot of the traditional tasks, such as budgeting, scheduling , and requirements collection."

There are two ways to look at it: Technology will either consume the traditional role of a PMO or empower PMOs to take their role to the next level. We're optimistic about the latter.

Be an early adopter

Automation can handle repetitive tasks, but the technology needs to know which tasks to automate and how to perform them. Someone needs to set up the automation before it can be useful. Being an early adopter and learning the technical skills to harness automation tools will allow PMOs to maintain control over the process.

"Automation sounds like it reduces work, but the data to be automated has to come from somewhere," Garrod says. "Someone has to set everything up and make sure their time, the cost , the projected cost, and the estimated cost are all loaded properly."

UDN Task Manager 's work collaboration platform features automation capabilities, including advanced custom workflows and dynamic request forms . These save PMOs from unnecessary repetitive tasks but still require a PMO with expert knowledge of the project to set them up properly.

Take advantage of your newfound time

The goal of automation isn't to take PMOs' jobs —it's to give them more time to do the things they do best. Google famously encouraged their employees to spend 20% of their time working on creative projects, which led to the creation of innovative products like Gmail and Google Maps. Automation has the potential to free PMOs to find ways to become even more valuable.

"Automation is going to allow PMOs to get away from the activities that can be commoditized and focus their energy where they are needed most, like organizational change management ," Barnard says. "PMO teams can spend more time being human and interacting with other human beings about things that make the biggest difference in getting to the desired impact.

“By leading these conversations, PMOs can discover the challenges various business units are having or the risks they're worried about. They can position themselves to help facilitate the strategy definition and realization. This is where inspiration happens. This is how a PMO can make a big impact."

Provide value where machines can’t

It may sound like machines are taking over, but they aren't. Technology will play a valuable part in a PMO's role in the future, but it can't replace the intangibles a seasoned professional brings to the table.

"Tools are great, but tools don't think," Garrod says. "You can automate some functionality, but it's people that do projects, not the tools. It's the interaction between the project manager and the delivery team that gets stuff done, not automated emails telling someone to do something."

Find ways to communicate the benefits of a PMO with top management regularly, or create dashboards to share your value visually. UDN Task Manager 's dashboard feature provides transparency across the entire organization so everyone can see how your team is performing.

What challenges do PMOs face?

Even though most PMOs are created to realize a specific organizational goal or desired outcome, they still struggle with many challenges. When almost 83% of organizations worldwide have one or more than one PMO, it's important to review and resolve any common PMO challenges. These can include:

Lack of executive buy-in

To eliminate silos and achieve better results, consistent and clear communication is key. Keeping all your internal and external stakeholders and teams aligned and in the loop can go a long way in taking the PMO closer to its ultimate goal.

Inadequate usage of PMO tools

Did you know that about 55% of project teams do not have access to real-time project KPIs? In fact, about 50% of team members spend a day or more generating project progress reports manually. With the sudden shift to remote working due to the pandemic, cohesive Agile teamwork faces its share of challenges. Set up your teams for success by using a centralized PMO hub to store information, plan projects, visualize deadlines, and help your teams deliver results on time.

Struggling with effective resource management

PMOs of all sizes agree that effective resource management is one of their biggest struggles. When you're trying to maximize efficiency with the least resources, it’s essential to have clear visibility of capacity utilization and a precise understanding of the organizational goals.

Rapid pace of change

The digital revolution has transformed the workplace, including the fundamentals of the PMO. A recent report confirms that disruptive technologies are reshaping PMOs — and as a result, organizations are becoming more Agile to deliver consistent value to their customers. Greater emphasis is being placed on measuring outcomes rather than deadlines, and teams are being held accountable for predefined goals in place of specific job tasks.

Mismatch in aligning PMO and organizational goals

No business likes to waste resources, energy, and precious time operating without a proven strategy or action plan. Since every company faces diverse opportunities and challenges, it is vital to have a PMO strategy that aligns with the organizational goals and desired results.

How to overcome common PMO challenges

The traditional project management office functions and structure are changing. Still, the skills that seasoned PMOs bring to the table always provide business value when harnessed correctly.

Savvy PMOs can stay ahead of the game by:

UDN Task Manager 's automation and reporting tools are just a few features that can help the PMO of the future to succeed. Sign up for a free trial and see how we can help your organization embrace change.