Program management offices have been around for a while, and they have evolved over time with the needs of different industries. Traditional program managers have relied on strict organizational structures to get work done efficiently. Alternatively, agile PMOs are more focused on strategic priorities, adapting to changing environments, and quick program execution with minimal resources.
To be even more precise – a traditional PMO is set up to support large, long-term programs and projects, while an APMO helps organizations that use agile methodologies to improve their flexibility and better manage the challenges of an fast paced, ever-changing environment.
This blog post will explore the key differences between these two approaches. It is crucial to understand these differences because many organizations are moving towards a hybrid structure with elements of both models. This article will cover what each type of PMO does (i.e., how they operate), who should be involved in them, advantages/disadvantages for each model, and things you need to know before choosing either one for your organization.
What is a PMO?
The PMO is a strategic tool for managing the portfolio. It provides initiative direction and guidance to achieve alignment and ensure collaboration with business objectives, customer expectations, and stakeholder needs at a global level. A PMO also ensures consistency of processes across programs – such as how work should be planned or reported on – which enhances accountability among team members and other stakeholders in the initiative.
A PMO is not just for large corporations. It can be a valuable tool to any company with more than one initiative in the portfolio and needs help prioritizing those initiatives to keep them on schedule. The key benefit of a PMO is that it provides an additional level of oversight to ensure that all initiatives are streamlined and aligned with the company’s objectives.
Traditional program management organizations are typically hierarchical, centralized, and siloed. The traditional role of a PMO is to execute projects that senior stakeholders have defined outside of the organization for operational efficiency reasons. These positions are most likely found in large corporations where executives cannot afford the time to oversee each project by themselves. Therefore, traditional PMOs have a dedicated, centralized body of staff assigned to work on specific projects. The program management process is rigid and linear in these PMOs to complete tasks as efficiently as possible. However, agile organizations value flexibility in initiative management because they understand its relationship with productivity and innovation.
What is an APMO, and how does it differ from a traditional PMO?
An APMO differs from a traditional PMO in many ways. The difference between these two can be broken down into four main components: the organization, process approach, planning and control tasks, and program management techniques. First, an APMO is typically decentralized, which means that there are no centralized groups of staff assigned to any particular initiatives – teams are meant to be self-reliant and cross-functional. Moreover, teams in APMOs are typically smaller, focusing on creating quality products quickly – which is where the process approach comes into play.
An agile organization will use more short sprints to produce a final product. In contrast, traditional organizations tend to include long-term upfront planning tasks that can be time-consuming with little payoff for the team. APMOs handle planning by beginning with a general idea of the final product, then breaking it down into smaller tasks to be completed over shorter periods with an adaptive approach. This typically leads to the initiatives being delivered earlier and better than traditional organizations because there are no unnecessary long-term processes taking up time.
Traditional PMOs are often led by a project manager who assigns tasks to team members and oversees the timely completion of all necessary milestones. Agile organizations do not need one person to manage an entire organization because initiatives are broken into smaller, easy-to-complete sprints. This gives the agile team members the flexibility to shift their focus to their strengths and interests, allowing them to produce high-quality results.
Main differences between traditional and APMOs
Traditional PMOs often lack accountability because there is no way to measure success or failure. This means that work can be done for months before seeing any tangible results. It discourages employees from putting in their best efforts as long-term investments. In contrast, agile organizations can measure the success and failure of each sprint in real-time. This approach gives their teams a clear sense of what is working so they can adjust accordingly.
Additionally, traditional PMOs are not as flexible because their focus has long been on large projects with set start and end dates. With those rigid parameters, it becomes difficult for them to keep up compared to organizations that use the agile approach. Additionally, traditional PMOs have strictly defined project managers, while agile organizations allow team members to self-manage, meaning that there is much more flexibility and accountability in APMOs.
Finally, traditional PMOs tend to spend time on organizational bureaucracy, such as filling out forms and attending meetings. Alternatively, agile teams focus their energy on getting the work done – this often leads to less wasted resources, whether it be time or, for instance, the allocated monetary resources from the initiative budget.
While it can be difficult for traditional project managers and their team members to switch over from a conventional PMO style to an agile one, if they are aware of this in advance and properly educated on the matter, there should be no serious challenges during the transition.
Benefits of using an agile approach
First and foremost, there is waste reduction – a core tenet of agile; this means less time spent on organizational bureaucracy and more focus put into the work. Additionally, there is a decreased need for traditional PMO resources. In many cases, an organization will only need an agile coach or two to help them transition to agile methodology. A third benefit to using the agile method is the ability for teams to self-organize and work more collaboratively.
All of these benefits can be grouped up into three main categories:
The first category is increased visibility. With traditional PMO, it is common for the project manager to be blocked from seeing the bigger picture of what’s happening with their projects. This happens because they mainly focus on getting things done and not allocating time for meetings like status updates or retrospective sessions. This lack of visibility makes it difficult for the project manager to make decisions.
With the APMO, there is more focus on coordination across agile programs and communication with stakeholders than just getting their specific tasks done. This allows them to have a clearer picture of what is happening on all initiatives and their alignment with business value – making them better decision-makers.
The risk of project failure is lessened with APMOs because they focus on communication and decision-making throughout the process. This allows for quick changes that may have been overlooked in traditional PMO because there was not enough visibility into program dependencies, business value alignment, budgets, and governance.
As we have already mentioned, the agile method allows the development team members to be self-reliant, which, in turn, results in high productivity. The team members do not need to wait for the team leader to assign tasks – they can see what needs to be done and complete it on their own.
Traditional PMOs have a lot of work-in-process because there is no focus on communication and decision-making throughout the process. The whole project is based on the idea that you wait until all requirements are met and understood before any work is done.
This leads to a lot of time spent in meetings, which can lead to inefficiencies on the team. Not everyone may have helpful input during those discussions. On the other hand, APMOs can provide a much more efficient way of working because they are constantly pushing for immediate action.
All of that said, an APMO cannot be adopted by anyone who has not been trained in agile principles and practices. This should be discussed before making any change to the workflow of the organization.
One of the most common ways to prepare a team to transition from a traditional PMO to an APMO is by providing training courses in agile practices and principles. This can help them learn how to think, plan, execute, and measure their work differently than before. It also helps make sure everyone on the team understands why this is beneficial to both them and the company.
This is where the i4 Group can help. They offer an interactive Lean Portfolio Management training course that teaches the practical tools and techniques necessary to implement strategy and investment funding, Agile portfolio operations, and lean governance. This knowledge can significantly benefit your team to make informed decisions during the agile transformation.