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25/04/2021

Agile PMO vs Traditional PMO: Key Differences

Agile change must happen while an organisation is already in flight, and that’s why so many businesses are adopting its framework. With industry conditions and consumer demands in flux, agility has never been more prized.

Agile portfolio management seeks to identify, prioritise, organise and govern projects throughout an organisation, keeping your team members efficient and productive. Instead of being a heavy-handed influence, disciplined agile portfolio management operates in a lightweight and streamlined manner. Ultimately, it maximises the production of business value in the long-term.

But what are the key differences between an Agile PMO and a Traditional PMO? Let’s take a look at three areas that highlight the contrast:

  1. Mindset
  2. Workflow
  3. Process.

PMO Mindset

The framework underlying the traditional PMO dates back to the 1950s. At that time, militaries worked to construct complex missile systems, which involved the coordination of many types of projects such as training, support equipment, launchers, etc. During the 1980s, the project management techniques learned earlier spread to other industries, especially construction and IT. 

Traditional PMOs focus on three main areas of support: strategic planning, delivery support and Centre of Excellence (CoE). Services may be provided through one permanent office or a series of linked offices (Portfolio Offices, Program Offices and Project Offices). These entities may provide a mix of centralised and localised services.

A Disciplined Agile Framework governs with a lighter hand than a Traditional PMO, focusing on value over cost. Where a Traditional PMO might ask, “what is this going to cost?” an Agile PMO asks, “what value will this generate?” This mindset shift helps organisations to focus on making better investments and producing more value for customers. 

A disciplined agile approach not only wants to produce value for customers, but it also wants to be good at it. Such a focus leads to investing in processes and environment improvements, even if they don’t provide immediate cost savings. 

And whereas a traditional approach tends to favour project teams over stable teams, the agile community prefers long-lived stable teams with a membership that changes slowly over time. Another way to look at it: a traditional mindset brings people to the work, and an agile mindset brings work to the people (the stable teams).

Another mindset shift affects which projects an organisation takes on. With a traditional PMO, decision-makers might focus on which projects bring in the most revenue. Still, with an agile PMO, alignment takes centre stage, aligning stable teams to long-term value streams or lines of business (LOBs). High-performing agile teams deliver frequent value to stakeholders, creating a positive feedback cycle that maximises effectiveness.

PMO Workflow

Traditional PMOs commonly use a waterfall model to describe their workflows. In traditional project management, managers clearly define project parameters beforehand, and the PMO’s formal processes outline workflows, documentation and (minimal) customer involvement.

With a Disciplined Agile Framework, on the other hand, projects are divided into smaller tasks. An interactive input system of continuous delivery and feedback keep the customer involved during the entire process.

The Portfolio Management efforts receive metrics from the build efforts and operational intelligence from the run efforts. Portfolio managers use this critical data to make better, more informed decisions.

PMO Process

While Traditional PMOs employ controllable processes to accomplish their goals, Agile PMOs use a variety of critical process factors. There are several critical process activities to consider:

Identify potential value

Your portfolio management team will identify potential new products through monitoring the business environment. Through customer feedback, market competition analysis and agile monitoring, your PMO can prepare for the future.

Prospect potential endeavours

The portfolio management team may choose to consider the business case for the potential projects, perhaps creating high-level estimates of the endeavour’s market potential or return on investment (ROI). Focus groups and experiments may be employed to provide valuable data.

Set priorities

Few organisations have limitless resources and budgets from which to work, so you’ll have to prioritise projects. Factors for agile decision-making include business value, business risk, scheduling implications and dependency on other projects. 

Manage the portfolio budget

While traditional PMOs tend to follow an annual budgeting process, agile PMOs take a rolling wave approach that evolves as your needs and means fluctuate.

Finance your projects

Agile approaches to financing don’t have to feel free-wheeling and risky. With regular monitoring and ongoing analysis, an Agile PMO can finance both the initial funding and resources for continued efforts.

How to Choose the Correct Approach

Very little remains static in the business world, and the past year has reinforced the necessity to embrace agility. But that doesn’t necessarily mean that an Agile PMO is the best approach for your organisation. 

How do you know which approach will work best for you? Consult with one of our PMO experts at MetaPM. A Disciplined Agile Framework might be the best solution for your organisation. To learn more or talk about the many different approaches that may help you reach your goals, get in touch. We’re here to help.

 

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