What are the benefits of PMOs adopting an Agile approach? 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 who build successful teams. Creating the right culture and adopting the servant leadership concept is essential.
The Agile approach provides companies with a common thread for assessing and planning for the future, one that links the portfolio level to the project level.
PMO definition
The term PMO means Project Management Office or Program Management Office. 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. Although both work on different scales and 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 critical 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.
Projects and programs can often be suspended or canceled when market changes occur. This happens because those initiatives no longer represent primary investments for the business. Companies use the PPMO to cancel programs or projects that are no longer the best investments of the company’s resources.
The Portfolio Management concept aligns with the Agile Manifesto’s statement about “responding to change over following a plan.” Agile processes regularly assess the value of new deliverables and 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 introduce Agile processes do not need to change the roles and responsibilities of Project, Program, and Portfolio Management. At the same time, they need to consider that these processes will impact the PMO level. The impact will be smaller at the PgMO and PPMO levels. This happens because Agile processes focus mainly on planning, executing, and monitoring projects. 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 can undertake complex work by focusing on small work one at a time. Generally, this approach should be applied at all levels when uncertainty is high enough that long-term plans are no longer reliable.
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. 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 viewing and planning an organization’s future, from the portfolio level down to the project level.
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