How IT PMOs Can Remain Relevant in the Age

of Digitalization
Published: 31 October 2017 ID: G00332169

Analyst(s): Daniel B. Stang

Program and portfolio management leaders must scrutinize the relevancy of

their IT PMOs against challenges posed by an unstable business climate, or
risk obsolescence. This research offers suggestions for repositioning an IT
PMO as a strategic partner for digitalization.

Key Challenges
■ Established IT project management offices (PMOs) are increasingly scrutinized by the business
for their lack of speed in delivery and their antiquated execution methods, leading to doubts as
to their relevance in the age of digitalization.
■ The original charters and goals of established IT PMOs are mostly outdated when applying
them to the potential strategic roles IT PMOs can play in supporting digitalization.
■ The limited insight and involvement of IT PMOs with the business leaders striving toward
digitalization flies in the face of the documented successes past methods employed that IT
PMOs previously built.
■ With business strategy details often being outside the purview of many IT PMOs, establishing
and maintaining strategic alignment to program and project execution is difficult when weak or
unattended relationships exist between an IT PMO and the business it serves.

Recommendations
PPM leaders must optimize and promote the value contribution of the IT PMO in the age of
digitalization by doing the following:

■ Revisit the original design goals and charters of their IT PMOs and questioning how well they
support strategy-to-execution alignment.
■ Retain any beneficial governance, execution efficiency and holistic visibility processes derived
from the IT PMO's original goals and carry them forward, as long as they support digitalization
via speed and value.
 ■ Build a much stronger partnership with their CIO by establishing effective collaboration and
communication practices with the CIO's business partners and peers.
■ Update the IT PMO's current operating model and execution processes in ways that deliver
digital business outcomes, rather than mere project status reporting and order taking.

Introduction
Many established IT PMOs were launched mainly in the spirit of self-management, by first
optimizing the processes and behaviors under their direct control (see Figure 1). These activities
emphasized data collection and project status reporting, rather than mapping out an execution plan
across projects aimed at realizing strategy.

Figure 1. Program and Portfolio Management Maturity Model

Source: Gartner (October 2017)

Established IT PMOs may express an intent today to have a foundational set of goals or aspirations
of becoming facilitators of strategy realization, but they often lack the forged relationships with the

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 business required to ensure strategic alignment to, and rationalized spend on, their program and
project delivery.

This needs to change now, because the original IT PMO "build" assumptions were based on goals
and charters that do not account for what we're seeing now in the age of digitalization. In most
cases, the goals and charters of today's IT PMOs are outdated.

Digitalization, the main driver for business transformation, presents an opportunity for an IT PMO to
retain the best practices it honed for execution, while also repositioning itself as a primary partner
with the CIO, by offering itself up as the following:

■ An idea generator and innovation hub for testing and potentially creating proofs of concept with
the business on new digital ideas
■ A subject matter expert in work execution and delivery
■ An insurance "policy" capable of risk avoidance and/or mitigation

These capabilities can support and offer assurances to the business when it pursues innovative, yet
risky, digitalization initiatives. With a focused effort, an established IT PMO can arm the CIO with
what he or she needs to help the business understand how to invest in digitalization and explore
many possibilities within reach, while also providing some assurances that common investment and
execution risks can and will be averted.

Analysis
Understand Your CIO's Challenges in Relation to Their Service to the Board of
Directors
Knowing the challenges your CIO faces in relation to meeting the needs of the board of directors
(BOD) is critical to forming a more trusted partnership between your IT PMO and your CIO. Above
all else, today's CIOs are under immense pressure from senior business leaders to deliver growth.

Digital business opportunities are both exciting and highly attractive, and reaching them can be
game-changing and drive unprecedented growth. However, the current sentiment of business
leaders (such as the BOD) regarding IT's inability to enable business innovation presents some
perception challenges for the CIO and IT, as depicted in Figure 2. In such a climate, PMOs must
identify irrelevant processes and replace them with new approaches that encourage innovation and
experimentation that promotes digitalization.

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 Figure 2. The Board's Satisfaction With the IT Organization

n = 100

Source: Gartner (October 2017)

Gartner research (see Figure 2) indicates strongly that today's BODs are not at all, slightly or only
1
moderately satisfied with the IT organization's performance. At the very least, it is safe to assume
that BODs are not confident that IT can deliver significant new business growth.

BODs also know that digital business is full of risk and that organization and culture are major
obstacles to digital business transformation. This also does not breed much additional BOD
confidence that IT can succeed in delivering on risky digital investments.

Almost paradoxically, BODs want CIOs to focus on and deliver on their top priority — growth — and
digitalization presents significant opportunities for growth. Yet, at the same time, BODs are not fully
embracing the idea of digital partnerships and do not fully understand how to invest in digitalization.

This is where the opportunity presents itself to an IT PMO wanting to remain relevant in the age of
digitalization and where the repositioning of an IT PMO should begin. By first understanding what
the BOD wants and what it expects a CIO to deliver, an established IT PMO must then revisit its
original goals and charter, and scrutinize the same against the CIO's agenda.

Linking a newly defined purpose for the IT PMO directly to the CIO's plan for satisfying the BOD is
crucial to making the IT PMO relevant again (see "Four Types of PMOs That Deliver Value"). IT
PMOs should take steps to reconnect with and re-establish a newer partnership with the CIO. Older,
less-relevant program and portfolio management (PPM) processes and behaviors around execution
are often ripe for replacement in a cultural shift toward innovation. In organizations making such a

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 shift, PMOs should replace less-relevant processes with new approaches to encourage innovation,
experimentation, and faster and more-continuous delivery of more-strategic IT investments
promoting digitalization.

Form a Stronger Partnership With Your CIO by Helping Them Articulate What
Investments Are Required for Digital Business to the BOD
CIOs struggle to fully understand the capabilities and opportunities an IT PMO aligned with
business strategy can offer. From a project execution perspective, PPM leaders often know more
about what they can do and how they can do it than a CIO or a BOD. This is why building a stronger
partnership with your CIO must include the IT PMO's assistance in helping the CIO communicate
more effectively with business leaders. Essentially, doing the above forges the link between strategy
and execution.

Business intelligence is crucial to helping CIOs pursue digitalization initiatives. In fact, top
2
performers of digitalization have CIOs that are significantly involved in advanced analytics activities.

Arming your CIO with the "how" and "why" answers to questions surrounding digital business
investment, including the analysis of potential payoffs and benefits, should be a major objective for
an IT PMO wanting to remain relevant in the age of digitalization. An established IT PMO's ability to
identify and then avoid and/or mitigate risks should be presented as an insurance policy for digital
business investment — one that can work to protect the business from catastrophic failure.

The role of the CIO is changing, as depicted in Table 1, and likewise, an IT PMO's role in supporting
the CIO should also change.

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 Table 1. The CIO Role Is Changing

From To

IT-outcome-focused Business-outcome-focused

Order-taking Collaborative agenda-setting

Supporting Compelling

Cost-controlling Revenue-building

Process re-engineering Data-exploiting

Sourcing Creating

Function-focused Platform-focused

Seeking parity Seeking differentiation

Within IT Everywhere

IT-risk-focused Business-risk-focused

Source: Gartner (October 2017)

An IT PMO repositioning itself as a partner with the CIO for digital business transformation should
be changing its goals and charter to reflect that of the shifting CIO's role. Existing IT PMO
processes and activities should be measured against the attributes listed in the right column of
Table 1.

Wherever the IT PMO's existing processes and best practices do not present a good fit or support
for the shift in the CIO's role, those processes and activities should be dropped and replaced with
new ones that support the new role of the CIO and promote strategy to execution alignment.

Additionally, an IT PMO today should be focused strongly on helping the CIO adopt the following
recommendations (see "Survey Analysis: Boards' View of Digital Business Will Force CIOs Out of
Their Comfort Zone") as it relates to how the CIO should interact with the BOD regarding
digitalization:

■ Start any discussions with the BOD by referring to its priorities, then link current efforts to those
priorities by creating a matrix of BOD priorities mapped to active and approved projects.
■ Reallocate the IT organization's resources from traditional projects to initiatives addressing
business model changes the enterprise needs to make by identifying projects addressing
business model changes, along with lower-value traditional projects.

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 ■ Look for innovations in other industries (technologies, business models, products and
processes) or in your industry for digital business by engaging with outside experts, possibly to
prepare a future vision report.
■ Use new technologies turned into business opportunities by identifying newer technologies and
opportunities on projects and adopting them when they offer new benefits.
■ Recommend and test digital technologies (through project recommendations) to enter new
markets, generate new revenue or achieve other business objectives.

Together With Your CIO, Help Build a Culture Conducive to Digital Business and
Transformation
Culture and, at times, a false sense of security are among the hurdles companies face when
investing in digital business. IT PMOs may not have much influence in how business decisions are
made, but when it comes to executing on the actual change vehicles, the programs and projects
themselves, an IT PMO has much to offer. The business simply cannot execute on digitalization
without the assistance of IT.

But the traditional project execution approaches cater mainly to waterfall projects, and the business
needs an IT PMO to deliver on a more continuous basis. Experimentation with shorter project life
3
cycles and shifts to an IT product focus from an IT project focus are well underway. IT PMOs must
adapt how they work, report and help the business make decisions by being creative and innovative
in defining newer, more-relevant IT PPM processes supporting digitalization.

IT PMOs must help the CIO support the following best practices to trigger and nurture cultural and
process changes in IT conducive to digital business:

■ Expand the use of Mode 2 behaviors within IT, and offer to show peers in the business units
how Mode 2 works.
■ Hire more people with social science and humanities backgrounds to help IT better understand
how digital technology fits into people's lives.
■ Adopt organizational tactics cutting across traditional management hierarchies, such as
hackathons, scrums and internal startups, to encourage innovation.
■ Cultivate relationships with board members who know the most about IT, and arm them with the
information they need to make strong cases for IT.

Replace Your IT PMO's Original Goals and Charter With Those That Support Digital
Transformation-Based IT Program and Project Portfolio Management
Once an IT PMO has invested in the above best practices, it has the blueprints and deeper
considerations to do the following:

■ Rationalize its existing processes.

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 ■ Remove the PPM processes that do not support the CIO in driving strategic business
investments (in digital or other significant investments).
■ Add new PPM processes and behaviors that support strategy to execution alignment between
the IT PMO and the CIO.

At this point, an IT PPM leader should go back to the beginning and reimagine an IT PMO in the age
of digitalization. By rethinking the IT PMO from the ground up, the assumption that all the things an
IT PMO does today are all relevant and all should be carried forward, while piling on more digital-
friendly processes, should be dismissed.

In reality, most IT PMOs are still struggling to balance the supply and demand of their current
workloads. But if the IT PMO is not on the critical path to deliver the strategic business' digital
transformation agenda, they will become obsolete.

Additionally, piling on more process without rethinking the IT PMO first will only impede progress.
Rethinking your IT PMO means going back to the first 100 days of PPM as a PPM leader (see Figure
3).

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 Figure 3. First 100 Days PPM Roadmap

Source: Gartner (October 2017)

In combination, "The Project Portfolio Management Leader's First 100 Days" and the "ITScore for
Program and Portfolio Management" can be used to rethink the IT PMO and design a new charter
and goals, along with new processes and behaviors, to forge and strengthen a stronger relationship
with the CIO.

Gartner Recommended Reading

Some documents may not be available as part of your current Gartner subscription.

"Survey Analysis: Boards' View of Digital Business Will Force CIOs Out of Their Comfort Zone"

"The Project Portfolio Management Leader's First 100 Days"

"ITScore for Program and Portfolio Management"

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 "Four Types of PMOs That Deliver Value"

"Survey Analysis: PPM Leadership in the Era of Digital Business Requires Speed, Change and
Collaboration"

"How to Establish a Product Management Practice to Drive Digital Business Success"

"Use the Four Styles of the EPMO to Evolve From Visibility to Transformation"

Evidence
1 "Survey Analysis: Boards' View of Digital Business Will Force CIOs Out of Their Comfort Zone"

2 "The 2018 CIO Agenda: Mastering the New Job of the CIO"

3 "IT Key Metrics Data 2017: Key Applications Measures: Project Measures: Current Year"

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