Need for a Hybrid PMO in Changing Industry
Traditionally, the execution of projects were tracked against baselined triple constraint (scope, schedule and budget). These projects/programs are multi-year engagement and during the initiation phase the triple constraint are fixed based on the approval. PMO tracks the project/program status and report the same to the stakeholders. Project reporting generally includes health and status of projects/programs using various metrics such as SPI (Schedule Performance Index), CPI (Cost Performance Index), and other dimensions such as program/project risks & dependencies, financial health, resource utilization, resource availability, etc. These programs/projects are aligned to organizational long term strategic goals.
Now, the competition and globalization has changed the direction of the marketplace and it is important for an organization to change the focus to stay ahead in their area of business. Information Technology has become a backbone for the business and upgrading from the traditional system to new system has become inevitable.
The changes we see in the market place is the shift from the traditional approach like, process and tools to individuals and interactions, documentation to working software, contract negotiation to customer engagement and following plan that are developed few years ago to responding change has brought the organization to stand on their toes.
Many organizations are adopting Agile to address their customer’s demand. In the world of Project Management execution too, we see a shift from waterfall model to agile method implementations. This environment creates interesting challenges that must be overcome in order for organizations to maintain an adequate level of visibility and financial control, and to ensure there is accountability for successful outcomes of these investments. This lead to the new form of PMO, Hybrid PMO.
The concept of Hybrid PMO is to accommodate the best of both Waterfall and Agile for a robust project delivery.
Agile typically does not have fixed scope as the scope keep changing depending on the market demand, therefore bit challenging to baseline the cost or scope. The scope and cost are generally defined for each sprint (will discuss in another blog here), which is typically 2-4 weeks. The baseline scope and resource estimate may be captured from the project charter, stories etc. to forecast. This can be traced in PMO reporting.
The benefit of following an Agile model for project execution is maximized in a cost-sensitive environment; if actual project cost has reached the original budgeted allowance, the project sponsor can decide to close the project, but still obtain functional, tested, valuable capabilities that can either be released to the market (or user community), or be used as the foundation for a future project. This situation is very different from a traditional project, where cost or schedule delays usually result in project cancellation without any tangible value being delivered. This is the biggest difference between the traditional Waterfall approach and the Agile, iterative method.
By aligning Agile and traditional projects in terms of health tracking and reporting, PMO’s gain the ability to provide a consolidated view into the entire project portfolio, which enables the organization to manage their investments in an effective way.
This blog is written by Sajan Variar.
Sajan is an IT Infrastructure professional having 23 years of experience in Portfolio & Project Management, Service Management, Transition Management, IT Delivery and Operation Management. He has extensively worked with the clients from US, LATAM, EMEA and APAC at various levels across BSFI, Manufacturing, Logistics, Retail, Airline domains. He is also certified in PMP, ITIL 3 Expert and COBIT 5. He has been consulting in setting up Project Management Office, Data Center, Monitoring Center, IT road map; defining Process, Procedures and SLAs.