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Enabling Organizational Change through the Program Management Office - Anthony A. SchianodiCola

Anthony A. SchianodiCola
New Coordinates
Spring 2016

Many financial institutions rely on their Program Management Offices (PMOs) to lead organizational change initiatives. Demands on PMOs are increasing as continued regulatory developments prompt financial institutions to undertake more change initiatives. At the same time, challenges throughout a program's life cycle can prevent it from realizing its full benefits. To achieve successful outcomes, PMOs should drive decisions at both the operational and strategic levels to ensure programs are efficiently delivered and produce lasting, enterprise-wide results.

The Challenge with PMOs
PMOs are teams responsible for ensuring that projects and programs achieve their intended goals and are delivered on time, on budget, and within scope They also play an important role in managing how their program deliverables, or outputs, drive beneficial outcomes across the organization. For instance, an institution seeking to comply with new regulatory reporting requirements might establish an audit and data validation program to ensure compliance with the new rule. The program's PMO will lead the initiative's development and implementation It will also manage how program deliverables help the organization meet its immediate reporting requirements and achieve its long-term goal of sustained regulatory compliance

However, research indicates that most PMOs have considerable room to improve their management capabilities According to the Project Management Institute, only 18 percent of organizations consider themselves highly effective at managing organizational change.

From the beginning, a program can run into trouble if there is no consensus among stakeholders about its strategy. Poor communication can exacerbate the problem, leading to ill-defined goals and milestones. Financial and human capital deficits, unclear roles and responsibilities, and executional inconsistency are also common obstacles. These risks become even greater when changes in business demands or resources put strain on a program's operating model. Upon program completion, the inability to convert outputs into meaningful outcomes can threaten to turn promising endeavors into failed efforts with no tangible results. Keeping all of these risks at bay is a challenge, but not impossible.

A Balanced Approach: Managing Operational Delivery and Strategic Impact
PMOs should lead both the operational delivery and strategic impact of the programs they manage. This includes managing not only how day-to-day functions are performed, but also the direction of the projects they oversee and how organizational benefits are realized.

Robust program operating models should be built to support consistent and efficient processes, while taking into consideration future change scenarios and risks. In addition, PMOs should proactively engage key stakeholders to relay program benefits and gain widespread support. They can also leverage institutional and subject matter knowledge to analyze program output and communicate strategic insight to executive sponsors.

This approach can be implemented throughout the program life cycle. By proactively addressing both operational and strategic considerations, PMOs can overcome common challenges that lead to program failure. The figure below summarizes this concept by providing an overview of the program management life cycle and highlighting risks and key components of success at each stage.

Key Components of Success
PMOs can address both operational and strategic considerations at each stage of the program life cycle by incorporating the following components into their programs:

1. Align program and organizational strategies to establish stakeholder buy-in and support

Ensuring program objectives fit within an organization's overall strategy is a prerequisite for success. PMOs should identify and clearly define their program objectives and how they support higher-level organizational strategies. This will help the PMO identify what projects it should include in its program portfolio. As the program strategy is defined, key stakeholders should be proactively engaged so the PMO can communicate the program's proposed benefits and objectives. Initiating early discussions with stakeholders about the initiative's vision will help the program gain buy-in and support from all parties involved. The PMO should also use this stage to seek feedback about preliminary goals and milestones to confirm that they are achievable and realistic.

2. Optimize workforce and governance structures to address immediate needs and future demands

After the program's strategy and goals are established, the PMO will need to determine what human capital resources are needed and how to organize them under a cohesive governance structure. The PMO should work closely with the finance, human resources, and information technology departments to determine how many employees can be dedicated to the program. Individual roles and responsibilities can be defined based on available talent in the program workforce. The workforce and governance structures must allow the program to meet its established deadlines under its defined budget. They should also be able to withstand potential risks such as changes in business demands, financial and talent resource deficits, and productivity shortfalls. Forward-looking PMOs will minimize these risks by applying robust forecasting techniques that test how proposed workforce designs would perform under different future scenarios. This enables PMOs to determine an optimal structure to minimize risks and adapt quickly to change.

3. Drive operational excellence and continuous process improvement
The PMO should not only standardize operational processes, but also continuously seek to improve them. It can design standard processes that support efficient output delivery under the established governance structure. Once implemented, these processes should be continuously reevaluated for improvement. Technology can be leveraged to automate and streamline manual procedures. New program developments should prompt the PMO to reassess processes for gaps and redundancies, and take actions to redesign processes when appropriate. Process redesigns can be validated by measuring the impact on key performance indicators to determine whether enhancements achieve desired results. Commitment to continuous improvement will enable the program to identify and pursue opportunities that enhance productivity and efficiency.

4. Apply an analytical, data-driven approach to transform deliverables into organizational results
After program deliverables are produced, the P MO should ensure that deliverables are used to drive organizational benefits. To accomplish this, the PMO needs to do more than just monitor progress on output delivery. Instead, its focus should shift to also determine how that output can drive organizational change. For programs with data-heavy outputs, such as regulatory reporting data, the PMO should analyze the output to identify material trends and observations. Data analysis, in combination with institutional and subject matter knowledge, can help develop strategic insight about enterprise-level opportunities and areas of improvement. Communicating this insight to executive leadership will allow the PMO to influence strategic, cross-functional decision-making that will help the program achieve its intended goals.

Key Takeaways
A PMO can be pivotal to a financial institution's organizational change initiatives. Effective PMOs not only provide operational oversight, but also strategic insight and solutions to cross-functional challenges. Institutions struggling to achieve tangible results from the programs they implement should take note. They may need to transform their PMOs into more forward-looking, results-oriented entities that ensure efficient program delivery and lasting enterprise-wide benefits. 

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