Selling the Value of a PMO Approach to Smaller Firms
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- Delilah Howard
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1 Kim Tesch Product Manager, PMP
2 Executive Overview Most bankers appreciate the benefits of strong project management. Despite this, it s still common to encounter businesspeople who don t understand the value in assessing the bigger picture and the crucial role of strong project governance both capabilities a Project Management Office (PMO) supplies. This limited view becomes especially challenging in smaller firms and organizations. In such environments, decision makers often see the tools of sound project governance as unnecessary overhead, or perceive project management structure as an inhibiting weight. However, as IT programs become highly integrated with existing applications and continue to grow increasingly complex, the discipline of the PMO serves to pilot the project team through defined business requirements and guide the often disparate participants to a successful outcome. This paper spotlights common barriers smaller firms put forward that delay and hinder the governance of a PMO (often these small firms are important component vendors or recently acquired entities that need to be merged into larger organizations). This paper then offers strategies project and program managers can employ when working with partner firms that may not readily understand the value of a PMO approach. The Need for the PMO Numerous articles can explain the purpose and role of a PMO, and virtually all large banks have established some type of PMO organization. Large institutions long ago learned the need for strong, consistent oversight in crucial initiatives. The challenge comes in translating that governance to smaller firms, governance that may be critical to completing an initiative on time and within budget. According to a study by Project Management Solutions 1, 90 percent of large organizations (revenue over $1 billion) have a PMO, while only 61 percent of smaller firms (revenue less than $100 million) have that capability. 1 The State of the PMO, Project Management Solutions, FIS and/or its subsidiaries. All Rights Reserved. 2
3 Even with nearly 40 percent of small firms lacking PMOs, today s projects and programs are becoming increasingly complex. The IT infrastructure supporting banking technology such as internetwork connectivity, cloud computing, virtualization and service-oriented architecture is also getting more complicated. Moreover, bank infrastructure continues to see additional complexity with new product offerings such as digital banking, remote deposit capture, omnichannel banking and real-time payments. Today, banking solutions are interconnected, dependent on multiple product suppliers and are only as reliable as their weakest component. A financial institution will often turn to their lead vendor (or a consulting firm) to serve as the program manager on a multiphase initiative. The lead vendor must then orchestrate bank resources, large technology vendors and smaller partners who bring unique functionality to an overall solution. These smaller firms do not generally have a PMO or even project managers in the traditional sense. They often supply a critical component of the overall solution integral to the success of the program or project. Unfortunately, their project management role is usually filled by implementation, operations or development staff individuals who aren t necessarily qualified yet are often thrust into a coordinator s role. Therein lies the challenge for traditional project managers with a background in PMO governance. They need to bridge this gap between dissimilar organizations and cultures to deliver on time and on budget FIS and/or its subsidiaries. All Rights Reserved. 3
4 To understand the depth of this challenge, let s first explore some of the barriers small firms often erect when they reject PMO governance and its strong project management methodology. Barriers Small Firms Erect to Resist PMO Governance 1. Small organizations often fear they will lose their flexibility and inherent ability to respond quickly to customer requests. Quite often, large banks turn to small suppliers because they can use their size to get smaller firms to respond to difficult tasks or unusual product requirements. Small business owners trying to grow their operations, will hesitate before turning down any customer request. 2. Smaller firms often perpetuate an all-for-one attitude when faced with a new task or initiative. Job roles and definitions often do not exist; any employee can be considered for any role in the name of survival. While there is some truth to the saying that if you need a job done, give it to a busy person, this lack of specialization and disjointed assignment of resources doesn t facilitate project success. 3. Lack of understanding of the value of formal project management is another impediment to PMO governance. Many employees of smaller firms have never had to work under any kind of formal structure. They see a PMO as unnecessary overhead and often vocalize this sentiment. If a PMO is part of a clientfunded initiative, they may convey this lack of understanding of the value of PMO to the customer. 4. Some employees of smaller, tightly knit firms may resent the authority a PMO represents, especially if an outside sponsor brings the PMO into an initiative (often the client in a large and complex program). Employees may not want to take direction from an individual outside their own firm. 5. Many employees (of firms of any size) prefer the comfort of the status quo. This comfort can make the disruptive change that a project or program brings very upsetting. In many situations, simply introducing a PMO into a small firm can become a change management effort. 6. Some small firms may already consider themselves experts in project management, even though they have no formal governance processes or established procedures. They may have no benchmarks or other evidence to support this opinion, but a PMO must address it in order to govern and succeed. As these and other barriers surface, a project manager can employ a number of proven strategies to overcome the challenges that arise in working with smaller organizations FIS and/or its subsidiaries. All Rights Reserved. 4
5 The following list of tactics should serve as a starting point: Ask insightful and probing questions regarding the project management structure and governance within the smaller partner firm. Instead of pointing out deficiencies, ask how the smaller firm ensures consistency in their large initiatives. If a client is sponsoring the initiative, ask questions regarding how the smaller firm will address the larger client s project governance requirements. Samples of these probing questions are in the next section of this paper. As the project manager, insert yourself into the smaller organization to build relationships from within their firm. Time constraints and travel budgets may make this challenging, but there is no substitute for face-time to overcome differing perspectives on a team. In-person meetings also make it easier to identify future allies and resistors to the PMO, and it s always useful to know this type of information early in the project. Take time to transition to a complete governance PMO mode; don t expect every aspect of the PMO to become accepted immediately. Take it upon yourself to instruct and help to complete (initially) the project artifacts required by the PMO. Carefully research and understand why previous projects that involved a smaller firm were unsuccessful. If this organization has a poor working relationship with your firm based on past project work, find out why. It s very likely the absence of project governance and structure contributed to the project s failure. Demonstrate how a strong project manager can serve as the focal point or single point of contact between project members and the client (or sponsor). Taking on this role streamlines communications and can save individual contributors many hours estimating and having multiple conversations on one topic. This step becomes an immediate win-win for all stakeholders in the initiative. Find a sponsor or sponsors within the small firm who understand their organization s need for strong project governance. Use these sponsors as emissaries to help influence the acceptance of the PMO within their organization. The value of internal testimonials should not be underestimated. Find the resistors to the PMO governance within the small firm and try to cultivate their understanding of the value of structure and methodology. A soft-sell approach may not always succeed, but trying to win over project participants is easier than using the heavy hammer of executive force. Point out the ever-increasing requirements from regulators that compel banks to document their decisionmaking and development processes. Strong PMO artifacts can significantly ease audit or regulator concerns about IT governance. The nature of the PMO lends itself to reporting transparency and consistency, topics of concern for bank examiners today. Position the PMO as the single point of contact for change initiatives. A PMO can coordinate multiple sponsors and suppliers generically and not engender hard feelings between departments that stand to gain or lose because of the project FIS and/or its subsidiaries. All Rights Reserved. 5
6 Ensure the project manager following the PMO structure has knowledge of banking applications and experience in overcoming people challenges and internal politics. When introducing a PMO into smaller partner firms, using an experienced project manager will go a long way toward overcoming tough people issues. The following is a list of important questions project managers should ask of small firms that have no PMO structure or governance. These questions can uncover gaps and shortcomings that a PMO methodology can remedy. Probing Questions to Uncover Needs a PMO Can Fill How do you manage projects across your organization? How are projects selected and prioritized to ensure alignment to business needs? Does your organization have a defined process for managing projects? What are some of the challenges your organization faces in managing projects? Are you satisfied with the rate at which your projects are finishing on time, within budget and with high quality results? Can you describe a recent project that did not go well (late, over budget, low quality, etc.)? What happened? Do you have an enterprise-level view of your current projects and programs and their current statuses? Engaging in an open conversation covering the preceding questions will help reveal the need for a PMO. At other times, the need may become more obvious as the governance provided by a PMO is brought into an inprogress initiative that is behind schedule and over budget. Final Thoughts on the Value of the PMO A complex program or project without a formal governance structure and organization will likely fail or achieve only partial success at best. Smaller firms contributing critical components within a banking initiative should embrace the governance a PMO offers. They should avoid attempting to place an employee with no formal project management experience in the position of managing their portion of the project or program. Rather, they should rely on the PMO governing the program to supply project management personnel familiar with banking and who understand how to achieve project objectives on both tactically and strategically FIS and/or its subsidiaries. All Rights Reserved. 6
7 As small firms look to grow into successful, larger organizations, they should heed the findings of a recent study 2 conducted by the Project Management Institute (PMI ). PMI found the following attributes help organizations sustain growth and become high performers: Fully understanding the value of project management Having actively engaged executive sponsors Aligning projects to strategy Developing and maintaining project management talent Establishing a well-aligned and effective PMO Using standardized project management practices throughout the organization The project manager following a PMO methodology provides neutral leadership and can play the role of the traffic cop to keep project components moving and on track. Small firms can resent the PMO structure and may not always welcome a project manager outside their organization; however, the results derived from consistent governance and project accountability will speak for themselves. Contact Us For more information on program and project management services available from FIS Consulting, please visit or contact your FIS strategic account manager. 2 Capturing the Value of Project Management, Project Management Institute, March FIS and/or its subsidiaries. All Rights Reserved. 7
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