A Program Management Office is a valuable asset to any company, but they can get complicated. In a traditional PMO run organization, a project team’s success is often dependent on the top down organization of a single project manager or project management team. In an organization using agile practices, an Agile PMO uses a collaborative approach with stakeholders to produce results that exceed expectations. Both traditional PMOs and APMOs use various tools to work together and meet deadlines effectively, however APMOs maintain a lean support function that extends beyond projects to the portfolio level. Rather than a set list of activities to which it must adhere, an APMO has a better approach to governance as a whole.
To achieve agility, programs must have complete visibility into their progress and potential impacts at any time during the process. If not managed correctly, this could lead to costly delays in delivery and missed deadlines – leading to loss of customer confidence and possible revenue losses due to competition. Depending upon what type of team you are working with, there may be different requirements for what makes a good agile PMO. The goal of this article is to provide practical guidance on how to create your own APMO that aligns with your organization’s needs.
What is a Traditional PMO
A PMO is a crucial part of any company as it helps with both planning and execution. An Agile PMO is an updated take on program management techniques that takes it a step further. It strives to be flexible and quickly change as needed at the portfolio level. While traditional PMOs and APMOs share similar goals, their execution differs significantly. The most notable differences in an APMO vs a traditional PMO can be summed up as follows:
- In an APMO, control and planning is decentralized
- Budgeting and resource allocation is flexible in an APMO
- An APMO has a system of workflow checks and balances that serves to streamline the program execution
To fully comprehend what this means, it is necessary to understand the point of a program management office. Organizations may have a wide range of simultaneously ongoing initiatives, including emerging initiatives and standard functions. None of these are typically done independently. That is why, if any of them were to go awry, the organization would suffer at least some degree of risk. Suppose any of these initiatives were to fail. In that case, there might be legal exposure, compliance issues, stock price repercussions, and negative exposure. Those risks are not limited to the employees themselves, but to the entire company.
For instance, in a small-scale business, executives might be able to afford to take on these risks themselves. They typically would not see a program management office as a requirement due to their small size and close-working staff. Anyone who has ever been a part of an organization knows that transparency and collaboration are at the heart of any successful project.
However, with larger companies, critical oversight and governance are a requirement. In an APMO, business and technology leaders collaborate to ensure initiatives and are delivered on time. But that is not all – they also need to ensure alignment with corporate standards so that there is a risk management framework in place. These actions should be noted in the documentation. Executives cannot be involved in every decision of a large-scale project, so they delegate as much oversight and governance as possible to their value streams. So, how is this done while still maintaining portfolio integrity? That is when and why this work is delegated to the program management office. It is the department of an organization with the sole purpose of improving program management by improving efficiency and creating standardized processes. They also track metrics, develop and maintain program documentation and best practices, and offer training to the employees – all to streamline program coordination.
Key Components of an Agile PMO
The APMO has been around for a few years and is now becoming more widely known in the business world. As of late, it has been gaining traction because it offers many benefits over traditional PMOs.
To begin the conversation about APMOs, we should first explain what “agile” means. In this context, it means that the entire organization (including the program management office) at the team, program, and portfolio levels operates with speed and flexibility when dealing with changes. Additionally, it signifies that they can adapt quickly to new challenges or opportunities as they arise.
What Are the Characteristics of an APMO?
The crucial difference between a traditional PMO and an APMO is how those organizations view the amount of process to implement.
- Prioritization – APMO’s prioritize initiatives according to a clearly defined set of criteria.
- Grooming – Initiatives are organized and tracked in a backlog. One of the many benefits of an APMO is that keeping track of all upcoming and active initiatives is made easy by storing them in one location.
- Team empowerment – Team empowerment is widely accepted as essential for agile delivery. It means allowing teams to make decisions, be self-reliant, and removes otherwise time-consuming approval processes. Teams with a PMO can benefit from increased productivity and reduced costs as they work to complete their initiatives.
- Initiative Refinement – Traditional PMOs usually don’t have a clear approval system. In an APMO, all new ideas must go through initiation and approval before being included in the backlog.
- Team communication – In an APMO, teams are not always created from scratch; they often switch members and group composition throughout the initiatives. Cross-departmental teams stay together for an extended period of time and know each other well when initiatives end. This strategy results in more time spent synthesizing the reason for a change and less time implementing those changes.
- Measure team velocity – Traditional PMOs count hours, while APMOs measure team productivity and how they function in a sprint. It is an improved estimation of the duration of specific tasks as well as promotion of more productive work habits.
Traditional PMO vs APMO Organizational Structure
The organizational structures in a traditional PMO and an APMO are vastly different. In a typical (traditional) PMO, the top-down approach to leadership leads to business owners and project managers at the top of the chain of command. On the other hand, APMOs place business users at the forefront.
In a traditional PMO, the flow moves to the development team, developmental resources, quality assurance teams (QA), and various other resources. The PMO itself offers project support and guidance to the project manager, who provides progress updates to the PMO throughout the project lifecycle. The different resource categories are owned and managed by specific managers.
An APMO, in contrast to a traditional PMO, is not an overseer of the initiative. Instead, it plays the role of consultant to each program. Rather than tracking basic program elements, APMOs provide insight into creating better systems to help programs to coordinate and self organize. With the help of the Solution Train Engineer and Release Train Engineer, this includes coordinating value streams, supporting program execution, and fostering operational excellence.
The APMO may not be the middleman, but it is still essential to have a properly trained and collaborative team. You may also find that a hybrid approach is best for your group as you transition from traditional to agile.
Common Challenges For Organizations Transitioning to Agile Practices
Here’s the good news: if you are starting to implement an APMO in a newly agile organization, the main challenges can be split into three types:
This includes people that are new to the workplace, as well as teams that are new to working in an agile way. This, most often, manifests through issues with communication, where the teams still favor the direction of an authority figure over stepping up and taking control themselves.
There are two primary reasons why people stop engaging with the PMO. First, they may feel that their company culture does not allow them to have input into decision-making processes. Second, until a group of people finds its rhythm together, it can be difficult to negotiate both professional and interpersonal dynamics – and both are essential when running an APMO.
One way to counter these challenges is working to make your workplace more inclusive of different worldviews and visions. This may lead team members to feel more comfortable sharing their opinions. With this setup, you can expect your employees to learn about each other faster and engage in the project in a different manner.
Traditional PMOs often play the role of both manager and administrator. This can have a negative impact on team members. Micromanagement will look like taking over duties as a leader that should be delegated to other team members, or not delegating tasks in the first place.
The importance of initiative responsibilities and lines of communication need not be established through the use of generic titles, but should flow naturally from the very beginning of development. This can start by creating a collaborative environment:
- Hire flexible, experienced individuals who know how to collaborate.
- Try assembling your team in advance and view their personalities before they’re grouped.
- Create the ideal work conditions for newcomers and those of marginalized groups.
Another way to overcome micromanagement issues is to remember that APMOs cannot exist as hands-on participants and should act as expert process consultants that organize at the program level rather than performing tasks at the team level. It is important to make new procedures clear from the start.
Adopting agile processes can be difficult, mainly when teams have been functioning in a certain way for years. But for an agile transformation and an APMO to be effective, everyone has to get on the same page sooner rather than later. If value streams do not work autonomously, there will be poor communication that hinders the progress of an APMO and its ability to achieve a higher return on investment.
However, adoption can be smooth if you use the right tools that make it easy for all value streams to visualize and understand processes, tasks, and approvals.
Tips and Tricks For Running an Effective APMO
Developing transparency in the transformation process is the most crucial component of an APMO. Once there is transparency in place, constructive guidance and guardianship are probable. Resources that are struggling with agile practices may be helped before they flail.
Furthermore, regular agile health checks can be beneficial. For instance, in the framework of Scrum, this means an evaluation after every Sprint. Ideally, the Business Owner is involved in these reviews and helps to remind teams of key considerations by assigning clear business value to the work. Organizations should consider how they might accommodate variation. Your program initiatives will be in different circumstances, so it can help to start by defining the product ownership, program structure, and events.
A health check like this is a valuable strategy for coaching an APMO and is beneficial to teams who may otherwise feel neglected. Explaining the significance of each dimension and using a RAG (Red, Amber, Green) status can be of aid in these situations. If a problem is highlighted and the team does not believe they can resolve it, then they can flag it immediately as red. If there is time to remedy the issue before the next check, they may flag it as amber. If the problem remains unresolved, it is then marked as red. Through best practices in an agile health-check and a configurable escalation process, the Program Management Office can alleviate heightened tension from project stakeholders.
Why Would You Need an APMO?
Over-committing resources is an obstacle to on-time, on-budget deliveries. The PMO can only allocate resources committed elsewhere by the priorities set out in high priority status projects, which slows down projects and wastes time. An adjustment is required for the enterprise to keep up with today’s fast-paced business environment.
The PMO must adopt an agile mindset before it can lead the change and become truly agile. When a PMO is described as ‘agile,’ it means that team members will be creative problem-solvers who are also rapid responders and iterative collaborators. They will take feedback to allow for innovation. An APMO thrives on complex problems and changing conditions, preferring team empowerment over top-down autocracy. If this is the way you want to operate, then you have the opportunity to lead change in your enterprise by becoming an APMO.
Jeff Sutherland, co-creator of Scrum and global innovation partner at Gartner, presented a Harvard Business Review article based on his observation that leaders need to be agile in order to lead an agile organization. As quoted by the author, “This means operating like an agile team and viewing various parts of the organization as customers.” He goes on to point out the advantages and disadvantages of managing projects through a traditional PMO versus adopting an APMO. Whether you are just considering adoption, or have already taken up this way of working, it is necessary to understand why companies make the change from traditional PMO to APMO methods:
- APMO tends to be better at what customers want
- To optimize work delivery, APMOs identify priorities
- Provides flexibility to overcome constraints
- Agile Program Management Offices promote freedom to develop solutions and accountability for outcomes.
Agile management is also about variation. Some initiatives will be managed more traditionally, with requirements determined and deliverables due by specific deadlines. Whereas other initiatives may be driven by agile programs that use continuous feedback loops to adjust their course and make incremental deliveries. There are also hybrid ways of working that may prove to be the best way to achieve the desired outcome. The key is for the APMO to be nimble enough for constant monitoring to make sure progress, performance, and value can all be accounted for in a uniform manner.
If you are leaning towards leveling up your program management office to an APMO, the i4 Group is here to help. They offer Lean Portfolio Management training that is crucial for the transition!