The PMO can be considered the new fuel for organizational change. An effective PMO delivers business results. Everything starts with hiring and empowering key people that build successful teams. It is important to create the right culture and to adopt the concept of servant leadership.
The Agile approach provides companies with a common thread for how to view and plan for the future, one which links the portfolio level to the project level.
The term PMO means Project Management Office or Program Management Office. On the one hand, a standard PMO can act in three major fields: Project Management, Program Management, or Project Portfolio Management. On the other hand, companies may have different offices called the Project Management Office (PMO), Program Management Office (PgMO), and Project Portfolio Management Office (PPMO).
A PMO manages projects, while a PgMO manages mainly programs instead of projects. A PMO and PgMO work on different scales but are similar, a PPMO is unequivocally different because it focuses on project portfolios to achieve business goals.
In general, we could say that Project, Program, and Portfolio Management act at tactical, strategic, and business levels, in that order. In particular, Portfolio Management is about choosing the most important projects for the business, while Project Management is about managing projects properly. In the middle, we find Program Management, which allows the execution of tactical activities to produce strategic outcomes.
Portfolio Management and Agile
Portfolio Management helps companies analyze new and ongoing projects and programs to determine the initiatives that should be initiated, continued, or canceled.
What often happens is that projects and programs can be suspended or canceled when changes happen in the market. This happens because those initiatives do not represent primary investments for the business anymore. Companies use the PPMO to cancel programs or projects that are no longer the best investments of the company’s resources.
The concept of Portfolio Management is aligned with what the Agile Manifesto says about “responding to change over following a plan.” In fact, what Agile processes do is regularly assess the value of new deliverables, and at the same time to select the most valuable items to develop. Portfolio Management can be seen as a Product Backlog where projects and programs are similar to Stories and Epics.
Companies that decide to introduce Agile processes do not need to change the roles and responsibilities of Project, Program, and Portfolio Management. At the same time, they do need to consider that these processes will have an impact at the PMO level. The impact will be smaller at the PgMO and PPMO level. This happens because Agile processes focus mainly on how projects are planned, executed, and monitored. At the top, the details of planning and execution are not as relevant as they are at a lower level.
Organizations that need to manage uncertainty can adopt an Agile mindset. By doing so, they will be able to undertake complex work by focusing on small pieces of work one at a time. In general, this approach should be applied at all levels when uncertainty is high enough that long-term plans are no longer a reliable option.
Keep in mind
Portfolio Management supports companies in choosing projects and programs that represent primary investments for their business.
Even if the Agile approach focuses on managing projects, it fits perfectly with the nature of Portfolio Management. In fact, Portfolio Management can be seen as a Product Backlog where projects and programs are similar to Stories and Epics.
To sum up, the Agile approach provides a unique theme for how to view and plan the future of an organization, starting from the portfolio level down to the project level.
Francesco Pecoraro, PMP, PSM, PSPO, SSYB, SSGB, SSBB, CL, CC is the founder of francescopecoraro.com where he shares useful and practical information about project management, program management, project portfolio management, and agile methodology. Francesco has extensive experience as a project, program and portfolio manager, project management officer (PMO), digital transformation and strategic consultant. He is also considered a communication, public speaking, and leadership expert. Francesco writes about project methodologies, program, and portfolio management.