PMOs can sometimes be perceived as unnecessary overhead for already expensive supply chain transformations.
PMOs can sometimes be perceived as unnecessary overhead for already expensive supply chain transformations. In reality, the opposite is true, and if they are not constructed, supported or structured properly, the project will fail.
Supply chain transformations are very complex projects that require coordinated activities in finance, operations, supply chain, procurement, engineering, product development and leadership functions. The Program Management Office (PMO) is responsible for the coordination of activities between these groups of people. If the PMO is set up sub-optimally, projects tend to fail. In the Project Management Institute’s Pulse of the Profession survey from 2018, only 58% of organizations fully understand the value of project management. The organizations that undervalued the PMO for driving change reported an average of 50% or more of their projects failing outright (PMI, 2018).
In our recently published book, “Technology Optimization and Change Management for Successful Digital Supply Chains,” we thoroughly examine the challenges of digital supply chain transformation, and in one of the chapters, we show how the establishment of the PMO plays a critical part. The chapter is based on our first-hand experience from our global supply chain transformations.
To start, the chapter details the issues that require a good PMO:
The solutions to these issues are not easy, but the good news is that we have a playbook. First, we detail the structure, routines, communication, governance and other knowledge areas of the Program Management Office. Our system is grounded on the principles of PMI’s Project Management Body of Knowledge and tailored for the distinct challenges of the digital supply chain transformation. Secondly, the PMO has to be highly skilled in project management as well as supply chain and be fully (and visibly) supported by the business leadership. PMO responsibilities are no place to hide the B players. It has to be an experienced high performance team with direct reporting lines to business leadership. These folks have to drive and sell the project at the same time. Finally, the PMO must create the “burning platform” for change. This requires analysis and insights into what areas of the business will improve and the timing of the improvements as a result of the supply chain transformation. This ultimately wards off some of the scope creep and competing initiatives that the transformation will inevitably face.
Digital supply chain transformation is not easy. It requires a healthy doses of leadership, structure, and communication – and a good PMO satisfies that requirement. KPMG knows how to do this, and we have thrived in that role.
For more on creating a digital supply chain, please reference select chapters of Technology Optimization and Change Management for Successful Digital Supply Chains, a pivotal reference source that provides research on the application of digital business transformation programs to improve strategic, tactical, and operational supply chain processes.