Projects are the primary implementation vehicle of the corporate strategy. Insights into the progress, roadblocks and speed bumps of those projects is the critical role your Project Management Office (PMO) needs to perform flawlessly. The PMO tracks corporate strategy and ensures the project portfolio contains the right projects and resources to ensure the expected return on the strategy.  Properly performing PMOs should be identifying and alerting the executive team of projects drive further investments and alerting the executive team to need of projects that require reprioritization, additional support, postponement, scaling back, or even cancellation to deliver the strategy.

Here’s the problem. PMOs often underperform—badly.

Batting .500 in baseball is all-star performance, but a PMO performing at 50%—or even 62% (see Figure 1)—is a dismal commentary on the current state of project outcomes. If your supply chain performed at this rate, there would be serial pink slips. The Project Management Institute’s recent survey estimates $122 million wasted for every $1 billion invested (12%). Worse still is spending money this poorly on the wrong projects. Ouch.

Think of it this way. Your team is climbing a mountain and you’ve underestimate the food and water needed. No one sounds a warning. Half of the team doesn’t make it and is strewn along the the trail. Those that summit see that a competitor has already summited the correct mountain–right next door. You are left with a delayed strategy that is relying on an exhausted, famished, and demoralized team.

Figure 1: Project Management Institute, 8th Annual Project Management Survey, 2016

PMOs have been around for a solid 20 years, and it is still often the weakest strategy link beleaguered in scope creep, which eats up valuable time, intellectual capital, motivation and budget dollars.

What Your PMO Should Be Doing for You

PMOs must understand available resources in terms of budget, talent (skill and capacity), and leadership (ability to drive change, build organization capability in the right areas in the right sequence).

Governance of, and transparent and appropriate visibility into, programs and projects is key to optimizing your organization’s performance. The PMO must communicate with the leadership team to make game-time decisions on priorities, asset investment allocations and strategic shifts.
The PMO should be flawlessly executing on the following:

• Verify, through a cross-functional intake process, that the projects be approved for execution are the correct projects, in the proper sequence, to effectively implement the corporate strategy.
• Organize programs in a way that creates synergy, coherence, and coordination between projects.
• Determine if individual project managers have the tools, skills, and resources needed for success.  This includes all necessary governance processes and metrics to evaluate the health of the entire portfolio.

A Poor-Performing PMO Means Your Strategy Fails

A strategy without execution is a waste of time.  PMOs, by definition, should be a high-performing, critical capability to effectivity and efficiently execute on the right things, in the right sequence at the right cost.  Full stop.

SITUATION

A private equity firm sought growth by expanding into high compliance cloud and data services targeting the federal government domain. Capto was brought on board to evaluate a potential target acquisition. Focus was placed on a market assessment that included a demand and competitive analysis, a technical review of the relevant compliance standards, and an evaluation of how the market is addressing the standards.

THE SYNAPTIC SHIFT

The Capto team’s in-depth knowledge of the federal government and computer security domains was table stakes for the client engagement.  Capto combined these requisite skills with our team’s knowledge of other high compliance industries via our experience in healthcare and financial services to expand our client’s thinking regarding the target market. The target acquisition could help our client penetrate not just federal government opportunities, but several high compliance industries including healthcare and financial services. 

RESULT

• This shift in thinking allowed our private equity client to expand the potential markets behind their investment thesis resulting in an improved market evaluation process and more accurate bid for the target company.

Recently, we here at Capto had the opportunity to “eat our own dog food” at one of our clients, a Fortune 100 company. In the middle of a Capto-designed Business Intelligence (BI) Analytics Acceleration Program—part of our Synaptic methodology—our client’s big-data analytics leader accepted a position in another area. The VP in charge of BI asked us to step in and fill the leadership void in the analytics team. This meant that we were tasked with

• Running the day-to-day aspects of the department
• Implementing our Synaptic innovation programs
• Implementing, in detail, the organizational change management and process tasks we had designed
• Hardening and putting into production architectural modifications to the Big Data/Hadoop environment
• Working with the team’s sourcing partner to implement the accelerated innovation program to quickly identify and deliver Big-Data analytic solutions to the business community.

While we pride ourselves on leveraging academic research and in the strategic value we bring to our clients, it is the implementation of the strategy that proves our methods and forms the cornerstone of our approach to building, refining, and socializing the Synaptic methodology. Not only does this opportunity demonstrate our commitment to our methodology, it gives us first-hand experience in executing our own program. In short, we love to eat our own dog food!

Situation—Two Interdependent Companies Each Constrained by the Other’s Strategy

A Fortune 100 company found its ability to scale in a critical technical area was constrained because its software partner could not keep up with the demands associated with its custom software product. As a result, the broadcaster wanted to move to a commercial off-the-shelf (COTS) product, which would reduce software maintenance costs. The software partner also aimed to get out of the custom software business and transition into a product-based company, but they were constrained by cash flow and depended on revenue from their custom products. Both companies had the same goal, but couldn’t find the path to reach it.

Solution—A Synaptic-Shift in Thinking Fosters a Win-Win Solution

Using the Synaptic methodology, the client, with Capto’s guidance, was able craft a deal and develop a set of financial incentives that allowed both parties to achieve their strategic objectives. The broadcaster consolidated its spending in certain areas and channeled the savings to its software partner through changes in software licensing model. The broadcaster also took some of the partner’s work back in-house. These actions stabilized the software partner financially and freed up the resources it needed to move to the new business model. The broadcaster also provided advisory assistance in the development of the new product. In return, the broadcaster was able to meet its short-term demand requirements, decreased the risk associated with partnering with a small vendor, and effected a strategy that put them on a path to achieve their long-term goal of moving to a COTS product, one that was designed with their input.

By changing their way of thinking—what we call “the Synaptic Shift”—and focusing on the root cause of the problem both parties reached a win-win. 

Capto is a boutique management consulting firm offering strategic counsel and prescriptive guidance to help our clients (Fortune 1000, service providers, and private equity firms) make confidant and timely decisions regarding their technology investments. Our areas of focus include technology strategy and investment, sourcing, data center services, and investment advisory / mergers and acquisitions (M&A) support.

Like pretty much every other management consulting firm, Capto consists of seasoned C-level executives from both sides of customer/ provider divide with experience from across the technology business spectrum.  What makes us different is our fact-based, analytic approach that combines the best of academic research with our hands-on experience forged in real-world engagements that aligns the best practices in deploying technology-based solutions with our clients' business goals.  Our methodology, SYNAPTIC, was born out of our private equity practice and shaped over time to drive solutions to our all of clients at the speed of thought.  It leverages the diverse, multi-disciplinary background of the Capto team to make the cognitive connections needed to knit together the components necessary for differentiating outcomes.

We founded Capto on the premise that technology investments far too often fail to meet their operational or economic objectives. Our experience on both sides of the equation—in leading strategic technology investment initiatives for Fortune 200 companies and in having held executive-level positions at leading service and technology providers—has taught us that the technology ecosystem MUST perform to higher standards of timely, predictable, value-driven performance.

We also recognized that our experience equipped us with only some of the answer.  So we sought out leading academic research across disciplines ranging from supply chain to economics to technology harvesting the best available research and thinking. We discovered valuable insights, determined where existing practices could be refined, and engaged brilliant academicians studying companies, both large and small, who were achieving high-performance results.  During these formative years of Capto we integrated these elements into the repeatable, scalable, agile approach we call SYNAPTIC that enables our client’s IT investments to deliver impactful, predictable, and timely performance.

As a self-funded startup we were faced with the problem of how to fund several years of thoughtful study and analysis that developing the SYNAPTIC approach would require. Being practical above all else—and admittedly somewhat lucky—we turned to our network in the private equity world, but rather than seek investment, we went to work for them, evaluating potential technology acquisitions.

Our private equity clients and the engagements we worked on brought us our expected results—cash flow to sustain our time in the academic wilderness and the opportunity to refine SYNAPTIC in a repeatable, disciplined way through real-world engagements.  But we found unexpected results as well. The business model assessment tool we developed for our private equity clients rounded out the front end of how we now engage all our clients, private equity, service providers and the Fortune 200. Very simply, in keeping with our cross-discipline approach, we bring a mergers and acquisitions framework to evaluating the business of technology, allowing us to focus on the critical, ignore the noise, and prioritize the rest.

We are really excited that SYNAPTIC is delivering valued, lasting, and timely results for our clients. We thrive on the deep relationships we form and repeat business we receive from our clients.

Thanks for reading about our journey; we hope it gives you a sense of how we approach our business and yours.