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. For example, a project is started to implement an ERP system with the expectation that it will reduce IT costs by 10%. The PMO may take project responsibility to deliver the ERP system on time and within budget, but the ownership of the 10% IT cost savings lies with either the EA team that recommended the project, or the executives that did the cost benefit analysis. This distinction is important and is often confused.

In this example, EA takes ownership of the project benefits, while the PMO takes ownership of the project management and completion. Thus, the PMO provides EA with the means to execute projects in a timely manner.

The PMO can also help by keeping the EA team appraised of project dependencies, resourcing risks, and potential change requests. EA should be part of any project design reviews, and the PMO should not accept design changes outside of the EA waiver and review board process. This last point can derail initiatives very easily, and is a good example of how intended strategies can become misaligned.

Actions for the PMO to consider • Discuss with your EA team how to blend portfolio management, such that projects are managed in the same way as IT assets, processes, capabilities, applications, systems, etc.

• Offer to run a PPM workshop for the EA team. Use the workshop to focus on how resources and change requests impact project plans, and how benefits are tracked. This will help EA realize the value that PPM can bring by way of success measurement.

• Invite members of the EA team to join your review meetings. Ask them to update the team on what might be coming, and any changes in business or strategic direction.

www.changepoint.com/products/barometerit 6 Insights and Impact Analysis Drive Smarter Decisions The scope and pace of change is immense, and it shows no sign of slowing over the next few years—in fact, it just seems to be getting faster, with new disruptions occurring on an almost daily basis. “Traditional” is becoming a bad word, a synonym for not recognizing the need for, or refusing to, change.

Don’t think of change in terms of tools and technologies, although much of it is technology driven. Instead, think about change in the context of everything we do—from strategy planning to executive decision making, organizational and systems development, through product and service development, to sales and marketing. Everything is changing—not at once, but constantly.

To get and stay ahead in any business, however large or small, requires the ability to make smarter decisions faster and more frequently. When EA and PMO teams work seamlessly together, the business gains greater insights that enable smart decisions, helping to elevate both EA and PMO teams to the level of trusted advisor.

Smart executives understand the value they should get from EA and PMO organizations, but often the biggest barrier is that such groups are themselves trapped in traditional thinking and still apply traditional tools and techniques in a non-traditional world. So step out of your comfort zones, go meet and talk with other teams, and think about whether your traditional ways of working really help, or whether they are holding you and your organizations back.

www.changepoint.com/products/barometerit 7 Conclusion In today’s business world, we talk of goals and objectives, strategy and execution, business and IT. However, in almost every case, the goal or the means to an end will impact the technology you use or be impacted by technologies available. In this regard, we can safely work on the assumption that all projects are IT projects, and that all IT projects are business projects. By extension, PMO teams can’t truly succeed without EA, and conversely without PMO. EA will likely remain a dark art, known by a few people and seen and used by even fewer.

Consider the graphic below, based on the work of Henry Mintzberg. We can see that if we are to deliver either our intended strategy, or accept the realized strategy, then we need to take deliberate actions. By simply remaining focused on projects and systems, both EA and PMO teams are responsible for our organizations’ unrealized strategy.

Deliberate vs emergent strategies

Thus, the question is not about whether EA and PMOs can, or should, work together. It is about how and when they will start to do so effectively—much like Southwest Airlines—for the good of their organizations and themselves.

www.changepoint.com/products/barometerit 8 About Mark McGregor A popular speaker and frequent writer, Mark McGregor is recognized as having specialist expertise in the areas of Process Modelling, Business Process Management, Enterprise Architecture, Business Architecture, and Modelling Tools. Mark has worked in a leadership capacity with user organizations and software vendors on Process Transformation and Organizational Change across many vertical sectors, including Banking, Insurance, Utilities, and Manufacturing. Mark’s most recent experience was as a Research Director for Gartner, focusing on the use and application of EA tools and technologies to assist Enterprise Architects in creating world-class EA functions.

About barometerIT barometerIT by Changepoint is not an EA tool; it is a tool for EAs that is immensely helpful for PMO teams too. The difference being that an EA tool is typically a complex legacy tool, taking weeks to implement and months to deliver returns, and aims to be all things to all people. barometerIT is a simple, social, smart tool for EAs, with a laser-like focus for delivering quick results against specific initiatives.

By providing you with an up-to-date blueprint of your business and IT environment, barometerIT provides clarity that enables rapid creation and management of portfolios. This results in quick identification of areas for improvement, rationalization, and impact analysis. Such impact analysis is a must-have for modern PPM teams that seek to ensure that the projects they undertake do not sub-optimize the organization, and are supported—not stopped—by technology.

The secret of such speedy returns lies in the data-driven approach employed by barometerIT. You already have most of the information you need to make smarter decisions; barometerIT helps you collect and connect that information in the most logical manner, rather than drawing on a blank page. barometerIT has a low cost of entry and a steep return curve. It can be up and running within a day, and providing serious returns within four to six weeks. For more information on how barometerIT can provide a wide-angle lens into your business, visit www.changepoint.com/products/barometerit

About Changepoint Changepoint is a leading provider of work management solutions, including project and portfolio management, enterprise architecture, and professional services automation. We help customers worldwide transform business by giving executives, management, and teams new ways to collaborate, align investments, and gain visibility into business initiatives. To learn more, visit www.changepoint. com.

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