Why is it that the majority of large-scale multi-million-dollar investment management transformation programs will have armies of vendor, service provider, and implementation consultants, and yet employ a single junior or mid-level project manager as the PMO (project management office)?
The answer is that the role of the PMO is often viewed as “administrative” and not offering real value. The consequence of this thinking and approach is that the transformation program is doomed to failure. Why—and what can we do to fix this? Read on…
A typical three- to five-year transformation program in the investment management industry is going to include a number of parallel initiatives: implementation of vendor systems, outsourcing to service providers, reworking of data governance, implementation of an enterprise data management system, design and implementation of an enterprise data store and reporting solution.
Each of these core initiatives will be run as one or more projects. Vendors and service providers will have agreed a scope, cost, and timeline that they believed achievable at the outset of the program. They will work to deliver these. The same will be true of the in-house IT and data management departments. Each project manager on these initiatives wants to deliver on time and under budget. They and their managers want their weekly status reports to be green.
Unfortunately, human nature dictates that in this “survival of the fittest” environment, each siloed implementation team is not desperately concerned about the success of the other elements of the program. To do so would incur extra time, resources, and cost—and threaten the success of their project.
This is not a criticism, it is a recognition of fact. It is driven by the traditional RAG (red/amber/green) approach to status reporting. Each team submits a weekly status report. No one wants to report amber or red, so the primary focus becomes making your deliverable green—at the expense of all else.
This is why we need an “active PMO.” The multiple stakeholders described above—vendors, service providers, in-house departments—need to be actively managed (policed if you will) by a central program management team. Status reports need to be challenged, delivery timelines questioned, issues and risks identified, and bad news brought to light.
This does not mean assigning more PMO administrative assistants to gather more frequent RAG status reports and produce a more beautiful looking weekly program status report. It means assigning your best available project and program managers to take an active role across each of the implementation projects that comprise the overall transformation program. The core PMO team needs to have a direct role in the daily activities of all projects.
The active PMO approach supports two critical objectives. First, it ensures that the status reporting for each of the individual projects is realistic. Individual project managers will be fearful of showing a non-green status, but the active PMO members will have the experience and weight to challenge any status reporting that is being “economical with the truth.” Second, and arguably the most important, the active PMO will highlight actual or potential “cross-program” issues and work to ensure that these are resolved. All too often there are deliverables that span more than one project team, for which the responsibility is a grey area. Left to make their own decisions, a vendor, service provider, or IT team will say: “that’s not my responsibility—it’s yours.” The result is that the deliverable is neglected and the overall program is delayed or derailed. The core role of the active PMO is to look out for these cross-program issues and ensure that the deliverables are assigned and executed as required.
You wouldn’t build yourself a new house by taking $1 million, splitting it amongst the architect, electricians, plumbers and carpenters and saying, “here you go, build me a house.” You find yourself an experienced subcontractor that you really trust and you get her to manage the building of the house. The same is true for major transformation programs.
Don’t leave your program in the hands of a junior project manager and some clipboard-carrying administrative assistants. Create an active PMO and staff it with the best people available in the industry. People who have done this before, who know how to handle vendors and service providers; who can tell if a project is really on track, or is a disaster waiting to destroy your whole program.
