The State of the PMO research study will close in just a few hours (you might still be able to put in your two cents if you hurry) and already we are sifting through the initial findings. One startling change is that the percentage of PMOs that report to the CIO or other C-level role has risen dramatically: to over 43%, compared to just 27% in 2010.

That’s quite a steep trajectory, indicative of the increasing role of PMOs in managing strategic functions. Seeing this statistic reminded me of a colleague’s conversation with the CIO of a national food-service firm recently. That CIO remarked on the fact that all projects in the organization now “touch on” IT. This puts the IT PMO on an immediate convergence with enterprise project portfolio management. Yet how many IT PMOs are really capable of rising to the enterprise-level, transformational role without major business-process improvement? How many have the personnel with both program management and business management savvy to cross that line?

The average CIO tenure is less than 5 years, and falling; little time to pull off major organizational change programs, which is what the majority of large-scale IT projects really are. Any time you change work processes, culture is sure to change – or resist – with it. We’re doing our part to help these beleaguered executives: stay tuned for a new white paper on organizational change for CIOs, coming out this month. Here’s a sneak preview of the content:

The CIO’s Change-Readiness Checklist: Questions to Ask Yourself

•     What, exactly, will change?
•     What is the specific business reason for the change?
•     Who will be involved in the change?
•     What do they need to know about the change?
•     Who will manage the change?
•     What will we need to do to bring everyone on board with the change?
•     How will we deal with resistance to the change?
•     What resources are needed to insure the change is implemented effectively?
•     Is the organization ready for change?
•     How will we know the change was worthwhile?

2011 was touted by Forbes Magazine as the “Year of the M&A” and the past year’s business news showed that they were not far off the mark.

If you work for a company that has been in on this trend, congratulations – and now your real work begins! “Post-merger integration” activities include re-evaluating current practices, understanding cultural differences, getting projects that may have been halted back up to speed and integrating methodologies, systems and processes – all while successfully meeting business demands on a consistent basis.

In our work assisting companies with their transformation, there are several key activities that we’ve found to be critical to expedite the transition to a smooth operating environment:

• Set up a PMO to centralize governance of projects associated with the M&A.  This structure must fit the new culture and train resources on new/existing practices to promote process adoption.
• Implement portfolio management and prioritize initiatives that are critical to the integration and to maintaining market share.
• Focus on organizational change management by executing a cohesive communication plan
• Establish resource management; know who you have available and their capabilities.  Subsidize current staffing levels as required to meet business demands.
• Plan ahead and take action before projects veer off track.
• Don’t hesitate to bring in turnaround experts; they are skilled at quickly resuscitating troubled or stalled initiatives.

Mergers, acquisitions or divestitures hold great promise for jump-starting profitability … but there’s a significant risk of failure. In fact, a 2004 study by Bain & Company found that 70% of mergers failed to increase shareholder value. When we study the details of these failures, it’s hard to ignore the role that poor program management plays when these deals go awry.

As an example of how good program management, allied with good organizational change management, can create value, check out this brief case study.

Been through a merger recently? Share your thoughts with us.

Over the past decade, there has been a significant rise in corporate reliance on third parties to deliver products or services. The challenges created by the state of the current economy have driven an increase in the number of agreements with offshore alliances, pursuits of SaaS solutions and staff augmentation contracts. These vendor relationships help meet the demands for increased capacity, a greater global presence, and bigger cost savings – but along with the benefits of an expanded enterprise come the associated management challenges. A recent consulting engagement underscored the importance of proper vendor management for me.

Just as the adoption of project management and the PMO has become standard for most progressive organizations, I am seeing an increased appreciation for an effective centralized framework to manage vendors. Considering the amplified dependence many companies now have on contracted resources, it is vital that processes and tools be put in place to establish service, quality, cost, and satisfaction goals. In addition, assistance and governance needs to be provided to support the selecting and managing of third party companies to consistently meet those goals. It is not surprising that we are seeing an increase in the creation of Vendor Management Offices (VMOs) to perform that function. Rather than spread responsibilities for vendor interactions throughout the IT, financial, legal and procurement organizations, the VMO is being established to support the organization centrally.

The successful company of the future not only will have established effective policies and processes for managing the performance and compliance of their internal employee base, but also will have implemented effective frameworks to monitor, measure, and report on performance and compliance of their vendors as well. Your thoughts?

Every two years, PM Solutions Research takes the pulse of PMOs. That time is upon us again: the new survey has been posted. If you are involved in managing or implementing a PMO, please click through here and add your insights. As always, those who complete the full survey will receive the full results (includes data not published in the summaries).

Although we do keep certain themes constant in the research, the better to identify changes and trends over time, the surveys also look into new areas each time: issues or functions that our work with PMO leaders through the PMO of the Year program, or our consulting work with clients, bring to our attention.  So even if you have participated in the survey in past years, please do so again. The survey will be open until Jan. 13, 2012.

Thanks! and check out our new media partner for this research effort, Gantthead.com.

This is the time of year when, although our personal energies may be focused on home and family for the holidays, our business energies leapfrog over the year’s end: forecasts and budgets for 2012 loom large. What trends should we capitalize upon? What risks can we plan to dodge?

Forecasting – both business and weather – has gotten more dicey in recent years. Nevertheless, it’s safe to say that the challenges facing PMO leaders will not so much change as intensify over the coming 12 months. After a history of creating “stealth enterprise PMOs” by implementing organizational change from the bottom up, project management leaders are increasingly called upon to engage with the C-level. The failure to execute strategies is a key business problem that plagues our organizations, and it can be addressed when project, program and portfolio management are appropriately deployed. But the will to apply these tools has to come from the top, and project management has traditionally had a tough time “selling” itself to executives.

The present challenge for PMO leaders is to engage at the strategic level, communicating the benefits of program and portfolio management in language that resonates with executives. To do that, we must move beyond project performance to business performance. How do well-executed projects and programs impact the business metrics that are most critical to your company? How does optimizing resources and managing demand across the portfolio of strategic projects save money or improve time to market? Measure the right things and communicate the value proposition clearly.

We have in our hands a critical resource for moving business and government ahead, even in tough times. The logic of project management, as Tom Peters once remarked, is “unstoppable.” It’s up to us to start it rolling, though.

A good place to start: Check out PM Solutions’ resources on Strategy Execution, Portfolio Management, Resource Management and Value Measurement. Share these resources widely and incorporate our research-based approaches in your communication with executives. Clear communication of our discipline’s benefits will make the horizon brighter for both the grassroots and the C-suite.