Does this sound familiar? Your team is celebrating the on-time, on-budget launch of yet another big technology program, but it’s feeling like a hollow victory. Because while the program meets all the criteria you established at kickoff, whether it’s actually going to deliver what the business needs is anyone’s guess.
What happened?
Lately, we are seeing a lot of fingers being pointed in the direction of the Program Management Office. After all, the PMO people are the ones who are responsible for guiding the program to a successful launch. So if it’s not a success, it’s their fault. Right?
Well, not so fast.
The PMO is usually designed to just make sure programs are delivered on time and on budget. Making sure the programs actually deliver results that are in alignment with broader business objectives is another job altogether.
Too often, the PMO staff gets caught up in the day-to-day responsibilities of program administration and management, even as bigger issues loom. The inability to drive the program within the context of big-picture business goals and objectives means that many PMOs deliver programs that are technically successful according to the technology team’s standards–but fail the business value test.
Most companies with PMOs are aware that something more is needed. As a result, we’ve seen a lot of companies asking more of their PMOs. They’re rethinking how they’re structured to see what works–and what doesn’t.
The most effective approach we’ve seen so far is what we call a Results Management Office (RMO)–an approach that builds on the most effective elements of the PMO, expanding its scope in a structural way to keep strategic outcomes in the crosshairs. The RMO approach is grounded in linking smart business choices and rigorous technology implementations, often with hundreds of millions of dollars on the line. That takes discipline above all else–with a relentless focus on creating business value through an orderly, structured process.
Exactly how the RMO is designed depends on the individual needs of each organization, but we believe there are four core principles that should be part of every RMO.
1. Program Strategy and Mission Alignment
Business outcomes have to be front and center in any new program–and an RMO should make this a standard part of doing business. With an RMO, the first step is to establish a clear set of benefits that should be delivered by the program directly from the business case; then develop a program strategy and road map for achieving them. From that point on, every decision the team makes is scrutinized through the lens of the overarching program strategy.
Every decision has trade-offs. That’s not news. The challenge is to determine the right trade-offs based on business goals. For example, “option A” will improve cross-sell opportunities in the call center by an incremental 10 percent, but it will delay the implementation date by six months.
What’s the right answer? It depends on the business problem you are trying to solve. Is your current call center platform failing, resulting in the loss of customers every day? That points the way to one decision. But if your top priority is taking market share from your chief competitor, that may lead to a different choice.
Measurement is another key to an RMO-based approach. There’s always a lot of talk about measuring outcomes when the program is completed, but it rarely happens in practice. Why? Because nobody knows how to do it. The RMO should provide a clear set of criteria for evaluating whether or not the program is delivering the desired business benefits–both during the lifetime of the program and after it’s completed.
When it comes to measurement, start simply. Use standard measures that can be easily tracked and make sure you can obtain a reasonable baseline. It’s also important to avoid the temptation to overanalyze the choice of measures. This isn’t an exact science. Be specific wherever possible, but remember that it can be just as valuable to identify overarching trends.
Just as important, make sure accountability for measuring results is clearly spelled out. Establish accountability (often within your strategic planning function), and do it consistently across the enterprise. In the end, this isn’t the job of the PMO or the IT department. If nobody is on the hook for measuring and reacting to business results, the odds of achieving those results are slim.
