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Successfully Navigating the New Normal Requires an Adaptive Strategy

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Presentation on theme: "Successfully Navigating the New Normal Requires an Adaptive Strategy"— Presentation transcript:

0 EPMO – A Tool For The New Normal
Mastering the Four Competencies of a Strategic EPMO EPMO – A Tool For The New Normal Robert Handler Vice President Gartner Research June 18, 2013 Robert Handler This presentation, including any supporting materials, is owned by Gartner, Inc. and/or its affiliates and is for the sole use of the intended Gartner audience or other authorized recipients. This presentation may contain information that is confidential, proprietary or otherwise legally protected, and it may not be further copied, distributed or publicly displayed without the express written permission of Gartner, Inc. or its affiliates. © 2012 Gartner, Inc. and/or its affiliates. All rights reserved.

1 Successfully Navigating the New Normal Requires an Adaptive Strategy
Government, regulatory bodies Competitors Suppliers Levels of unemployment Economic climate Technology Globalization of trade Labor supply Internet Information systems Political ideology Financial institutions Taxes and tax revenue Postindustrial reality: • The direction of change is unpredictable. • The pace of change is unpredictable. • The nature of change is unpredictable. • Past results cannot predict future results. • The impact of change cannot be controlled. Markets, clients, customers

2 Slow and Steady Doesn't Win the Race Any More
Program Managers are struggling to find innovative ways to deliver business value under conditions of high uncertainty and short time frames. Adaptive program management is one way to make that happen. In this presentation we'll map out a low-overhead approach to program management that is flexible enough to keep everything going in the right direction no matter how complex or uncertain a program might prove to be. This image comes from the Project Gutenberg archives. This is an image that has come from a book or document for which the American copyright has expired and this image is in the public domain in the United States and possibly other countries. https://commons.wikimedia.org/wiki/File:The_Tortoise_and_the_Hare_-_Project_Gutenberg_etext_19993.jpg#filelinks

3 The Future Requires Building the Adaptive Organization
Current approaches to work need to accelerate Scanning (sensing) needs to become an art form Context (what, why, how) becomes the GPS system for the enterprise Understanding of capabilities becomes a lifeline for rapid response

4 The EPMO Enables The Adaptive Organization
Strategic Planning Assumption: By 2015, 60% of the Fortune 1000 will establish an EPMO to improve the value created by investments in projects and programs. By 2015, 60% of the Fortune 1000 will establish an EPMO to improve the value created by investments in projects and programs. Supporting the Strategic Planning Assumption: With continued pressure on financial accountability, organizations will require enterprise-level visibility of where their money is going Continued problems with project coordination across silos will further fuel the need for enterprise visibility and coordination of programs and investments Alternate position to the Strategic Planning Assumption: Organizations have the structure that suits their real objectives. A strong PMO is often perceived as a threat to other senior managers. Most PMOs are in IT — a weak PMO operating in a weak matrixed management environment allows the squeaky wheel to get greased. Organizations are increasingly concerned with understanding the value that their investment in projects and programs is actually creating. The strategy execution gap has gone from something pundits write about to something companies are actively beginning to close as quickly and effectively as possible. The need to proactively rationalize cross-silo dependencies is driving a need to establish an organization at the enterprise level that is chartered with keeping everyone focused on building toward the same strategic outcome. The economic environment in which organizations find themselves is driving their decision to adopt one of the four common styles of an enterprise PMO (EPMO).

5 Key Issues What is an Enterprise Program/Portfolio Management Office?
Critical steps toward the EPMO? Example case study

6 Defining the Enterprise PMO
If you are a PMO in IT adding the word Enterprise Does not make you an EPMO

7 Top Management becomes more involved when:
In Uncertain Times, Executives Often Require a Dedicated Staff Function to Help Navigate the Choppy Waters Top Management becomes more involved when: The current business model of the enterprise is under attack. It's clear that long-term viability of the enterprise is in jeopardy. Planned growth is so significant someone needs to keep an eye on things. Top Management tends to leave well enough alone when the "outlook" is stable. If success lies in a combination of being pulled with just the right amount of push. What conditions underlie the "pull state"? The most common that we've seen stem from three sources (though there are clearly more). The first is that there is a current (possibly short term) issue with the viability of the current business model. Easy credit, inexpensive raw materials, even price supports can all be factors that have made enterprises competitive in the past but now leave them vulnerable in our current volatile economy. The second factor is that organizations all exist in an ecosystem. A partner can become a competitor, or a new product from a company in another industry can suddenly emerge as a competitive product in the eye of the customer. The third driver is executive vision. In discussions with one client, they shared that top management had made the decision that since everyone else in their industry was scrambling to survive (which they weren’t) now was the time to make changes and investments designed to make them the dominant player in the industry.

8 The Four Styles of Enterprise Program Management Offices
Transformation Stability Facilitating Controlling Strategic EPMO Business Transformation Office Reporting EPMO Operational EPMO

9 The Reporting EPMO (Facilitating Stability)
Supports executive needs for visibility of what is happening in the organization Primarily fiduciary in orientation Mantra “We don't care how you do it – just tell us you are getting it done"

10 The Operational EPMO (Controlling Stability)
Centralizes ALL project and program execution across the enterprise Generally has staff in the 100s Focused on the "production of projects" Mantra “We only do one thing but we do it very well"

11 The Three Types of Strategy
Top Down Middle Out Emergent

12 The Strategic EPMO (Facilitating Transformation)
Ensures that top down strategy gets executed A small group of specialists that facilitate agreement about what to do and how to do it. Mantra "It's all about realizing the value of our strategy" MISSION STRATEGY COMMUNICATION CHANGE MANAGEMENT SUCCESS TACTICS BUSINESS RESOURCES

13 Business Transformation Office (BTO) (Controlling Transformation)
Facilitates the creation of a new "organization" or the evolution into a new market Focused on building the "web" of relationships necessary to support change Mantra “This is how a caterpillar becomes a butterfly” Photo: Lancaster County Amish by it:Utente:TheCadExpert | CC 3.0 BY-SA

14 Key Issues What is an Enterprise Program/Portfolio Management Office?
Critical steps toward the EPMO? Example case study

15 Understand What is Driving the Need for an EPMO
Survival Induced Change Strategy Induced Change Run the Business Planned Improvements Stabilizing Adapting External/Planned Internal/Reactive

16 Decide what the "P" in "EPMO" Stands For?
Project Capability Program Portfolio The “P” always stands for some form of Portfolio management (reporting or investment decisions) In more mature environments EPMO the "P“ stands for "Program At the highest level of organizational maturity "Project culture and an enterprisewide project capability is added

17 Build the Project Capability Center
The Goal of the Project Capability Center is to ensure that the ability to successfully execute projects is a core capability of the enterprise Skills Methodology training Performance- based competencies Project management training (soft skills) Methodology Project methodology Program methodology Portfolio methodology Resource management Tools Project scheduling Project Web sites Resource scheduling Collaboration Mentoring Transforming project managers into project leaders Creating high performing teams Knowledge Management Lessons Learned Best Practices Sharing tacit knowledge Community Building a project culture (performance, results, trust) Sharing tacit knowledge

18 Key Issues What is an Enterprise Program/Portfolio Management Office?
Critical steps toward the EPMO? Example case study

19 Example case study - Fifth Third bank
Placeholder for text (substitute your own text; delete when not used) Fifth Third Bank (NASDAQ – FITB) Super Regional Bank Founded in 1862 Headquartered in Cincinnati, Ohio. Fortune #326 Over $5 B in Revenue Over $12.3 B Market Capitalization Over $274 B in Assets under care Lines of Business Commercial Banking Branch Banking Consumer Lending Investment Advisors 49% interest in Fifth Third Processing Solutions/ Affiliate Model (15 Affiliates) >1,300 full-service banking centers (>100 Bank Marts) >2,450 ATMs 12 States: Ohio, Kentucky, Indiana, Michigan, Illinois, Florida, Tennessee, North Carolina, West Virginia, Pennsylvania, Missouri, and Georgia.

20 Problem Redundant/inefficient approval & prioritization of initiatives
“Silo-ed” Operational Model (by LOB/by Affiliate) Project redundancies PMO = IT Governance Viewed strictly as an enforcement agency Adoption challenges Redundant/inefficient approval & prioritization of initiatives Enterprise Risk’s NPI (New Product & Initiative) = Business Case justification + Risk Identification Questionnaires Finance’s AR (Appropriation Request) = Business Case Justification + Capitalization Worksheets IT Architecture’s ITAC Review = Business Case Justification + Architecture Questionnaires

21 Results Over 900 Active Projects Over 900 Projects Proposals
Health On-time Delivery Executive Dashboards Over 900 Projects Proposals Reviewed & prioritized by Tier 1 / Tier 2 IT Compliance self-regulation Delegation of Toll Gate Audits except for the Top Level of Rigor 5/3 emerged from TARP in Q1 2011 Paid U.S. Treasury back $ 3.4 B 2011 Bloomberg’s World 7th Strongest Bank Only 3 U.S. Banks made it in the Top 20

22 Final Thoughts Understand your environment and pace of change
Consider the EPMO as a proven tool to embrace change in the new normal Select a model that meets your needs Ensure the basics exist with a project capability center

23 Recommended Gartner Research
Predicts 2013: PPM Leaders Must Embrace Constant Innovation and Change Handler, Fitzgerald, Light, Apfel, Mieritz, Olding & Hanford (G ) Deciding Which of Four EPMO Styles Is Right for Your Organization Fitzgerald & Hanford (G ) PMO Versus EPMO: Symbiosis or Open Warfare Fitzgerald & Hanford (G ) The Enterprise PMO: An Emerging Force in Strategy Realization Donna Fitzgerald (G ) Is Your Organization Ready for an Enterprise PMO? Donna Fitzgerald (G )

24 EPMO – A Tool For The New Normal
Robert Handler June 18, 2013 Robert Handler Notes accompany this presentation. Please select Notes Page view. These materials can be reproduced only with written approval from Gartner. Such approvals must be requested via Gartner is a registered trademark of Gartner, Inc. or its affiliates. This presentation, including any supporting materials, is owned by Gartner, Inc. and/or its affiliates and is for the sole use of the intended Gartner audience or other authorized recipients. This presentation may contain information that is confidential, proprietary or otherwise legally protected, and it may not be further copied, distributed or publicly displayed without the express written permission of Gartner, Inc. or its affiliates. © 2012 Gartner, Inc. and/or its affiliates. All rights reserved.


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