In one of our earlier blogs, we wrote about Change versus Transformation and how to differentiate “transformation” from “change” that are lumped together and are used often interchangeably in the business presentations and at workplace meetings. In this article, we will attempt to establish clarity around the acronyms, “PMO” (Project Management Office), “EPMO” (Enterprise PMO), and “TMO” (Transformation Management Office), why organizations that might have PMO or even EPMO may still need to establish a dedicated TMO to more effectively oversee and manage transformation related initiatives.
Traditionally, the term PMO stands for “Project Management Office” and it is a group responsible for instituting and maintaining standards of project management across the enterprise. The PMO establishes the best practices for executing projects and is viewed as the keeper of documentation, guidance, and metrics for project execution, thus ensuring projects are executed on time and under budget.
Some organizations use the term PMO to mean “Program Management Office” to ensure that programs (i.e., the collection of interrelated projects) are better coordinated as groups rather than independently. There are a few large organizations who have established an EPMO – an enterprise-level PMO – to align their portfolios, programs, and projects to the company’s strategy and to ensure that the execution (of projects) benefit the entire organization.
While an EPMO supports the enterprise in prioritizing projects based on strategic alignments, the PMO supports business units in prioritizing projects based on tactical alignments. And for this reason, an EPMO reports to senior leadership team and offers guidance at the top of the organization, whereas a PMO exists within or at its own department and provides lateral guidance to those who are working directly on projects and programs.
A TMO is typically an enterprise framework responsible for actuating complex initiatives that align with a business’s strategy. It establishes a critical link between the executive vision and the work of the enterprise. Some organizations call this function a Strategic Implementation Office, whilst Gartner refers to this as a Strategy Realization Office. Regardless of the name, one element that sets a TMO apart from most PMOs is that the C-Suite proactively supports the TMO’s mandate to transform the organization which ensures it has the highest priority when implementing and affecting change.
A TMO should assume some or all of the traditional PMO roles and responsibilities. However, a transformation management office handles more than just projects. While a PMO knows how to support a project delivering additional features for an existing product or even a new product offering, a TMO helps facilitate the transformation of the organization’s culture.
Therefore, a TMO must play some specific roles that PMOs don’t. For example, an enterprise may have several needs that appear to be unrelated, such as cutting costs and upgrading its technology. At the first glance, these initiatives may appear to be misaligned with the business’s strategy but by bringing all such initiatives together under the TMO’s umbrella, executives could instantly see the correlation between the initiatives occurring across the business units and ensure that each project fits within the parameters they have set.
From the definitions of EPMO and TMO, it appears that both EPMO and TMO strive to alight initiatives to strategy and report into the executives at the top of the ladder. And this similarity would naturally lead one to asking the question: Why would organizations need a TMO if they already have a well-established EPMO in place?
In fact, this is exactly the question that we were faced with recently while interacting with one of the prospective enterprises. Their claim was that they have an EPMO that ensures that portfolios, programs, and projects are aligned to the business strategy and the lower-level PMO units make sure that programs and projects are executed to realize the outcomes on time and under budget.
True that EPMO aligns projects to strategy and it has the support of senior leadership, but what differentiates the TMO from the EPMO is that TMO has the mandate to transform the organization and governance from the C-Suite! This support from the top-most of the leadership ensures it has the highest priority when implementing and affecting change.
Where an EPMO exists, the TMO will work closely with the EPMO to ensure fit for purpose, approach, delivery, and controls. That said, the TMO will retain primacy due to the nature of its transformation objectives opposed to the steady state role often played by an EPMO. One of the key reasons for the establishment of a TMO is to ensure successful delivery of the transformation and to drive alignment across the organization and the C-Suite. In turn, the transformation objectives are met rather than being distracted by the objectives of specific programs of work.
It is important to call out that the TMO is a temporary governance vehicle that survives for the duration of the transformation and is often disbanded when the transformation is complete. If we acknowledge that transformations cannot succeed without the support and drive of the C-Suite, then the establishment of a TMO will ensure engagement at the highest level of the organization.
A TMO, whilst transitory in purpose, will need to be continually under the radar and be part of the corporate memory. As change is constant, to survive and succeed, organizations need to transform and adapt quickly to the changing market conditions. To enable the business to execute not just its current strategy, but as well respond to emerging market transformation trends, it is important that a dedicated team is in place at all times. The TMO will close down as the transformation program reaches its conclusion, but the model of a TMO and how to establish them will be something organizations will have to learn to do repeatedly in order to cope with this constant change.