High Performance PMOs Align with Business Strategy

Often, projects are approved that have little or no connection to the corporate strategy formulated by top management. This is simply because there is no corporate entity with responsibility for mapping strategy to projects and monitoring projects and portfolios to ensure they continue to address strategic initiatives even as those initiatives change over time.

Strategic alignment refers to the process of ensuring that an organization's activities, goals, and initiatives are aligned with its overall strategy. In the PMO (Project Management Office) context, strategic alignment involves aligning project and portfolio management practices with the broader strategic objectives of the organization. This ensures that the projects the organization undertakes contribute to its long-term goals and objectives.

Here, although the presence of a PMO is a prerequisite for aligning projects with business strategies, it is not sufficient. It is necessary for the PMO to have a high maturity level (according to CMMI, processes are defined and applicable to all projects, 3 and above) and for the PMO organization to be the manager (according to PMI) in order to align with the strategy. ( How can we increase PMO maturity  ).

Your organization is full of good ideas, but that doesn't mean they're the right things to present. You don't have the capacity to deliver everything at once. If there is no PMO, one should of course start by establishing a PMO. Once your PMO in the organization has sufficient maturity and organizational structure, it is necessary to start by creating a PMO strategy. Like business strategy, PMO strategy is a high-level roadmap that explains how the PMO will achieve its mission.

The PMO serves as a critical link between executive vision and corporate business. By providing a standard organizational methodology for planning, executing, staffing, prioritizing and learning from all the projects that make up today's organization, the PMO gives a locking consistency to organizational life.

Once the PMO strategy is established, it is critical that the PMO leadership follows this strategic road map. Every project is important for an organization. Every project requires valuable resources that can be used in many different ways.  

Strategic alignment between the PMO and business strategy is a two-way process in which the overall business strategy shapes the direction of corporate project planning and, in turn, project success influences corporate success. The strategic alignment of a PMO and/or a project should consider strategic focus, operational efficiency, and team leadership. The extent to which a project focuses on each of these dimensions determines the project's level of "strategic maturity". Research has shown that higher levels of strategic maturity are associated with higher levels of project success.

The PMO's compliance with the organizational strategy is as important as the PMO's compliance with the organizational culture. Early PMO strategy definition will ensure alignment with the overall organizational strategy. An effective PMO strategy is long-term (three years on average) and is used as a road map for the organization's tactical plans.

Some key considerations for ensuring strategic alignment in a PMO are: Understanding the corporate strategy, Aligning project selection and prioritization, Defining clear project objectives, Regularly reviewing and updating project portfolios, measuring and reporting performance, Encouraging communication and collaboration. It should be ensured that everyone is informed about the strategic goals.

By ensuring strategic alignment within the PMO, organizations can optimize project investments, increase the likelihood of project success and ultimately achieve their strategic goals.

References:

1- High-Performing PMO – J. Kent Crawford

2- PMOGuidebook – PMO Global Institute  PMO Global Institute Inc.