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Align Your EA and PMO Teams Common Goals, Greater Business Success Align Your EA and PMO Teams Common goals, greater business success OPINION PAPER BY MARK MCGREGOR FOR CHANGEPOINT Common sense would dictate that both EA and PMO groups have their common cause: working together to deliver the strategic change that senior executives desire. But can they break down the silos to ensure the very survival and relevance of their functions within the organization? High Performing Organizations Rally around a Common Cause Anyone that followed the early years of Southwest Airlines will know that former CEO, Herb Kelleher, and his executive team inspired amazing team spirit and loyalty among the staff. For many years, it seemed that everyone was on the same side, as if it was Southwest against the world—well, at least against the regulators, other airlines, and in some cases, airport operators. However, as Southwest began to tame those dragons and gradually turn itself into a significant force, things started to change. Staff were less team-focused, some departments became fiefdoms, and silo thinking reared its ugly head. As Herb and his team reflected, they realized that everyone worked as one when they were fighting a common cause, but became more fragmented as their “enemies” were defeated. In the case of Southwest, his answer was to create a new common cause, and sure enough, everyone started to rally and once again work as one. It may be worth noting that in this last case, the common “enemy” was, in fact, a made up one—it simply created a rallying point. No other airline has been able to replicate Southwest’s ability to foster team spirit and its resulting teamwork for more than 30 years. Investopia states: Southwest does not operate like other airlines. The differences are real and deep; the company’s contrarian philosophy leads to radically different strategic decisions. Even after CEO Gary Kelly made some changes after taking the reins in 2004, Southwest focused on simple, cheap, and happy… Southwest is riding high on a winning streak that is benefiting employees, customers, and shareholders…1 You may wonder how this story of Southwest Airlines relates to Enterprise Architecture (EA) and the Project Management Office (PMO). These two corporate entities have a similar history. EAs and PMOs have operated as individual fiefdoms or silos for many years. Each focuses on their own goals and objectives, and each thinks they are the king of the castle—but the reality is very different. 1Investopedia, Why Are Customers Choosing Southwest Over Its Competitors? (LUV) https://www.investopedia.com/articles/markets/110415/why-are-customers-choosing-southwest-over-its- competitors.asp www.changepoint.com/products/barometerit 2 A Common Cause for EA and the PMO/PPM Teams A few years ago, The Economist suggested that senior executives believe it is vital to have disparate business units contributing to corporate strategic initiatives—yet only half have been able to achieve their strategic goals. Similar surveys suggest that, while both PMO and EA groups are most effective when operating at a business unit level or higher and focusing on company-wide performance, only around 50% of groups do so. This might suggest that EA and PMO teams have been focused too much on individual projects and systems rather than delivering on strategy. Both groups report that their success is highest when they have strategic alignment—while at the same time agreeing that failure rates are still too high and as a result, both groups face increasing pressure to deliver more with less. From these surveys and anecdotal evidence, it becomes apparent that: • Both EA and PMO groups need to do more to deliver the expected and desired strategic benefits that businesses require • When EA and PMO groups try to fix their own issues without regard to the other, it is not a recipe for success • Senior executives remain disappointed with the results that both groups deliver EA sets the context in which the PMO realizes the benefits Thus, if common sense prevails, both EA and PMO groups have their common cause: working together to deliver the strategic change that senior executives desire. They should also be bound by the fact that only by working effectively together can they achieve this—and in turn, ensure the very survival and relevance of their functions within the organization. In an ideally-performing organization, the role of enterprise architecture is to set the context in which the projects and programs delivered by the PMO realize the expected benefits. www.changepoint.com/products/barometerit 3 Taking a Portfolio Perspective Most PMO organizations utilize a “PPM” approach—yet depending on who you talk to, you may hear different perspectives on what PPM is or stands for. To some, it implies project and program management. Others see it as project and portfolio management, while another group may relate it to project performance management. Whichever school of thought you follow, PPM’s prime goal is to manage projects and programs to improve performance. Things become somewhat less clear when viewed from a portfolio perspective, as this is often where confusion between EA and PPM occurs. While it is true that PMO teams may manage a portfolio of projects and the resources that are used to deliver them, EA teams have a different focus when it comes to portfolio management. One of the most common use cases for purchasing an enterprise architecture tool is for Application Portfolio Management (APM), primarily because it is seen as a clean problem that the business understands and that lends itself to obvious potential cost savings. This simple difference highlights the mismatch in discussions between groups: do required changes in an application portfolio need projects to make them happen, or do projects require changes to applications? The answer, of course, is that both are right—but it all depends on the level of project and what the goals are. Portfolio management means more than just projects www.changepoint.com/products/barometerit 4 What we can say is that projects and applications are only two examples of the portfolios you may need to manage. You need to manage the underlying portfolio of technology on which your applications run. You may also find that taking a portfolio approach to managing business capabilities and processes enables greater reuse and understanding. These last two cases are particularly useful in merger and acquisition situations, where the underlying technology and applications may be different, but the capabilities and processes may be the same. Whether approaching change from a PMO or an EA perspective, the fact is that if you don’t have sufficient understanding of your portfolios, particularly the technology-related ones, then you will not be able to undertake good impact analysis assessments. Organizations are interconnected webs, and to change one thing without understanding the implications could have disastrous effects. While EA groups can be relied on to manage most of the portfolios, potentially including project portfolios, they are not the owners of these portfolios. In this respect, EA poses no threat to either PMO teams, application teams, infrastructure teams, or strategy teams. They should merely be thought of as facilitators, and a resource to help other teams avoid costly mistakes and deliver on the common objectives. EA Provides the PMO with Strategic Alignment Intended strategies can only be realized when the projects undertaken by the PMO are in alignment with the organization’s roadmap. This roadmap is owned by the business, but maintained by EA. EA needs to maintain it, as any roadmap will have reach across many systems, processes, and organizational units—all of which are interconnected. Imagine for a moment that a business manager decides he wants to implement an ERP system. He contacts the PMO and they stand up the project. For the next three years, they work on this large and expensive project. However, the project is being undertaken outside the purview of EA and is not part of the roadmap. When it is time to go live, the PMO finds there is no data center to host the ERP, because EA had been pursuing a cloud-first strategy for the past two years with a goal to eliminate the data center. Suddenly, significant costs have been wasted and a re-implementation might be required. Had the business manager worked with EA first to discern when and what projects should be done before engaging the PMO, then the plans could have been changed. Maybe they would have selected another cloud-based ERP, or considered retaining a small in-house data center. Whatever the solution, it should be clear that executing projects in an uncoordinated fashion, at best, risks waste and, at worst, derails strategy completely. www.changepoint.com/products/barometerit 5 Actions for EA to consider • Ask your PMO leadership for clarification of what information would help make their life easier. Offer to provide and maintain this information, so that both teams can stay on the same page. • Offer to run an enterprise architecture workshop for the PMO. Use the workshop to focus on how changes in one area can fail if consideration for others is not taken. This will help the PMO realize the value that EA provides by avoiding wasted efforts. • Invite members of the PMO team to join your architecture review board. Expose and involve them in the trade-off decisions you make every day. The PMO Provides EA with Effective Project Execution Having great ideas and plans is one thing, but for results to be actively delivered, someone needs to take ownership. The PMO is that vehicle in most organizations, however the PMO is not responsible for the end result of the project.
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