A vast majority of U.S multinational firms – 93% in fact, according to a recent survey – are at some stage
of undergoing or preparing for business transformation initiatives. This is being driven by an unprecedented
confluence of changes in customer behavior, disruptive technology and domestic competition, among other
key triggers. It’s constantly “transform or wither” in today’s volatile global business, and
agility is the executive imperative of the day, albeit an elusive one. An organization’s long term success or failure
depends on its capacity to consistently identify opportunities and risks and renew itself faster than rivals do.
Business leaders need to be more efficient and effective at updating and implementing strategies than ever
before. If wielded correctly, an important weapon in their agility war chest is a new style of enterprise program
management office (PMO) that is more comprehensive than in the past.
Ms Motilal Padampat Sugar Mills vs. State of Uttar Pradesh & Ors. - A Milesto...
Tricks of the Transformation Trade: Disruptive Disintermediation, Agility Agents, and PMO Networks
1. I. AGILITY AGENTS
II. SPECIAL SNOWFLAKES VS. MAKING MAGIC
III. THE JOURNEY TO AGILITY IS A TRANSFORMATION UNTO ITSELF
Tricks of the Transformation Trade:
Disruptive Disintermediation,
Agility Agents, and PMO
Networks
WHITEPAPER
by Gil Makleff and Ron Rubinstein
2. I. AGILITY AGENTS
A vast majority of U.S multinational firms – 93% in fact, according to a recent survey – are at some stage
of undergoing or preparing for business transformation initiatives. This is being driven by an unprecedented
confluence of changes in customer behavior, disruptive technology and domestic competition, among other
key triggers (Forbes Insights, 2014). It’s constantly “transform or wither” in today’s volatile global business, and
agility is the executive imperative of the day, albeit an elusive one. An organization’s long term success or failure
depends on its capacity to consistently identify opportunities and risks and renew itself faster than rivals do.
Business leaders need to be more efficient and effective at updating and implementing strategies than ever
before. If wielded correctly, an important weapon in their agility war chest is a new style of enterprise program
management office (PMO) that is more comprehensive than in the past (Makleff, 2015).
Networked PMOs support agility
Analyzing the approaches recently adopted by a diverse group of Fortune 1000 and large non-for-profits in
sectors such as healthcare, energy, manufacturing and even philanthropy, we’ve gained a better understanding
of how these organizations create an enterprise-wide web of information sharing designed to facilitate better
strategy decisions and their deployment to bridge the gap with execution. At its heart are functional agility
agents networked across the enterprise that we identify as PMOs; some businesses might label them strategic
planning groups, program centers of excellence, business transformation offices, etc. Nomenclature aside,
extensive research has shown the potential for correctly structured intra-organizational networks to spur global
competitiveness and facilitate innovation and knowledge creation, especially in highly disparate organizations
such as multi-national, corporations (Nohria & Ghoshal, 1997).
Standardized data and processes drive agility
Case in point is a global manufacturing company that was in the midst of a strategic transformational effort to
improve development productivity. The firm prides itself in innovation speed: roughly a quarter of its marketed
products are less than a year old. After standardizing the scheduling and resourcing data across several dozen
portfolios spanning multiple business units and divisions for innovation, NPD, and product maintenance projects
– the organization was able to analyze product life cycle development processes and pinpoint prototype validation
as a significant bottleneck. They were also able to identify a division with a best practice validation approach
that cut the average validation time in half, shaving many weeks off planned delivery timelines. By leveraging a
network of PMO-like organizational constructs at the divisional and functional level, leadership was then able
to disseminate this best-practice process as a standard across the entire set of relevant portfolios within days.
Their strategy of increased productivity was realized with agility through an effectively closed loop of impactful
decision making and deployment.
UMT Consulting Group Trick of the Transformation Trade: Disruptive Disintermediation, Agility Agents, and PM Networks 2
To improve is to change. To be perfect is to change often.
-Winston Churchill
“I don’t see why you say a web is a miracle it’s just a web.” “Ever try to spin one?’ asked Dr. Dorian.
-E.B. White, Charlotte’s Web
3. II. SPECIAL SNOWFLAKES VS. MAKING MAGIC
It has been shown that combined process and data standards have a positive impact on business process
performance in terms of the individual measured dimensions of time, cost and quality (Muenstermann, Eckhardt,
& Weitzel, 2009). The example above illustrates the important role PMOs play in governing and disseminating
data and process standards, as evident in the analysis of all the businesses we surveyed, and how this can
be leveraged to increase agility. Whether it’s a major biopharmaceutical company looking to define key R&D
milestones across all pipeline programs for their board to review and make funding and market-timing decisions;
or the exploration & production arm of a major oil and gas corporation looking to schedule rigs with utmost
efficiency across multiple geographies – organizations that aspire to “manage by data” recognize that standardizing
information and processes across all layers of the enterprise is crucial to effectively identifying operational risks
and opportunities faster. The true value of breaking down data siloes perpetuated by the business’s “special
snowflakes” is in the disruptive disintermediation it enables – akin to that put in the headlines by companies such
as Uber, Airbnb and their likes. Putting a universal, timely view of capital investments, projects, and assets across
all portfolios directly in the hands of decision makers – this is when the “magic” happens.
Standardized portfolio selection drives alignment
Consider a major energy utility whose enterprise PMO is standardizing the intake, prioritization, budgeting and
tracking of multiple billions in capital investment across three business units. All proposals are presented using
a uniform business case, thus reducing the political leverage in investment decisions (understanding the political
implications of this type of transformation is key in laying the groundwork for change.) Throughout the year,
projects’ budget utilization will be tracked and funding reallocated from lagging projects to other, deserving ones
– based on objective assessment of alignment to strategy.
This example again illustrates the use of standards and governance to drive agility, this time with a focus on
financials. This dimension, along with schedules and resourcing alluded to earlier, combine to form the “core
content cube” of portfolio data that drives decision support.
UMT Consulting Group Trick of the Transformation Trade: Disruptive Disintermediation, Agility Agents, and PM Networks 3
Figure 1- Data and Process flows in a PMO network
STRATEGY
PROCESS
STANDARDS
PROCESS
STANDARDS
STANDARD
DATA
STANDARD
DATA
PROJECT PORTFOLIO
DECISION SUPPORT
DECISION SUPPORT
PROCESSES
CORPORATE
PMO
BUSINESS UNIT
PMO
BUSINESS UNIT
PMO
PRODUCT LINES REGIONS
4. While it is sufficient for a network of portfolios to be interconnected to disseminate this type of information
holistically, it is the network of PMOs that comes into play to disseminate data and process standards that can
drive rapid process change across the organization. Thus, the organizational maturity curve from a project
and portfolio management (PPM) perspective can be viewed as a parallel progression as depicted in figure
below. One can contemplate a positive network externality effect driven by the deployment of common standards
across the organization and increasing as more PMO “agents” participate in the network (Katz & Shapiro, 1985).
Meaning, business units benefit not only from having their own PMO but also from other groups PMO efforts as
they increase information sharing and cross-BU collaboration.
LIFECYCLE MANAGEMENT
FINANCI
ALMANAGENENT
RESOURCEMANAG
EMENT
Project Scheduling
ProjectPlanning
Project Estimating
Project Tracking
Financial Track/StratResource Allocation
BudgetPlan&Track
Integrated
Financials
Resource
Tracking
CapacityPlanning
Resource
Assignement
CORE
CONTENT
Figure 2 - Core content cubes of financials, scheduling and resourcing data
UMT Consulting Group Trick of the Transformation Trade: Disruptive Disintermediation, Agility Agents, and PM Networks 4
Figure 3 - The PPM-Agility maturity curve
PROJECTS
NETWORK OF
PORTFOLIOS
NETWORK OF
PORTFOLIOS
NETWORK OF
PORTFOLIOS
PMO
1.0
EPMO
2.0
SCOPE
MATURITY
TIME
PORTFOLIOS
PORTFOLIOS
PORTFOLIOS
NETWORK OF
PMOsNETWORK OF
PMOs
NETWORK OF
PMOs
5. III. THE JOURNEY TO AGILITY IS A TRANSFORMATION UNTO ITSELF
How one goes about designing and constructing this network highly depends on the structure of business units,
divisions, and functions within and the extent of collaboration and communication between them; and more
importantly on the organizational span of control at play. Centralized “monarchies” or more distributed “federations”
might be preferred depending on the organization’s focus on growth or profitability (Weill & Ross, 2005). The
company’s operating model and enterprise architecture will determine the appropriate level of business process
standardization and engagement model with linkages to at various levels in the organization (Ross, Weill, &
Robertson, 2006). Where change starts, depends on the driving forces: is it a bottom-up groundswell with
grassroots activists, a top-down executive sponsorship, or perhaps, somewhere in the middle. In the example
provided earlier, efforts were piloted on the utility’s $200M shared services portfolio before expanding to the
entire, multi-billion-dollar portfolio across multiple business units, exemplifying an approach to gain buy in from
a continuously broadening group of internal stakeholders that ensures adoption. The expectation is that as
executive managers better understand the connection between successful PMO deployment and agility, top
down transformation efforts will be the method of choice to ensure consistency across the organization.
An iterative infrastructure deployment approach
The organizational agility end-game described in this paper is a transformational change of significant magnitude.
It has to support the robust needs of an enterprise, which in many instances spans multiple geographies and
business units, all of which must ultimately be aligned and convinced of the value of change. Change is difficult
at best and consistent management towards enterprise maturation is a critical success factor. From a capabilities
and content perspective, the initial focus might be on enhancing financial governance, as in the example
described above, where capital planning and budgeting were fundamental to all functions in this organization,
and executive motivation to improve there was the greatest. Other organizations might have a propensity to focus
first on resourcing, or perhaps scheduling, e.g. in the biopharma sector where time-to-market delays can impact
hundreds of millions of potential revenue dollars. Thus, rather than adopting a monolithic ‘big bang’ approach,
an iterative one where the most pertinent content dimensions are included initially is highly recommended. As
PMOs and the organization mature, additional capabilities and connectivity can be added and enhanced. Failure
to focus on resolving challenges most critical to the enterprise results in PMOs that are perceived as ‘theoretical’
and those that deliver very little value (Schoen & Fitzgerald, 2014).
Having covered people, process and content considerations, it’s worth adding a final footnote on tools and
technology. Key IT considerations in the context of agility are: support for collaboration, robust visualization and
workflow flexibility. The advent of software as a service (SaaS) / cloud-based PPM tools is well aligned with the
agility transformation paradigm, as it de-risks change by removing large infrastructural investments from the
process. Iterative seems to apply more aptly to SaaS — that is, defining initial specs upfront and then evolving the
system as it matures. From an architectural point of view, cloud-optimized SaaS is attractive in that it allows for a
level of flexibility and gradual improvement (Handler, Jones, & Stang, 2015). Many large enterprise environments
might choose the path of the custom cloud solution since it allows for maximum flexibility in delivering solutions
to a diverse user base while maintaining low overhead and minimal infrastructure investments.
UMT Consulting Group Trick of the Transformation Trade: Disruptive Disintermediation, Agility Agents, and PM Networks 5