Establishing the Program Management Office: A Key Enabler for Digital Supply Chain Transformation

Establishing the Program Management Office: A Key Enabler for Digital Supply Chain Transformation

Chad Wiseman (KPMG LLP, USA)
DOI: 10.4018/978-1-5225-7700-3.ch006

Abstract

This chapter covers the importance of the program management office (PMO) in a digital supply chain transformation. The objective of this chapter is to discuss the key issues in digital supply chain transformations in terms of managing the PMO, followed by a discussion of the solutions and best practices for mitigating these issues and ensuring the PMO is a value-added function and key enabler of a digital supply chain transformation. The reader should have a good understanding of the activities that the PMO should perform, the skills required for PMO resources, and the process of building the business case and using it to track the benefits to prove the transformation was effective.
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Background

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. Its essential objective is to actively support and partner with senior business leaders to ensure the transformation will deliver the expected value while not significantly disrupting the day-to-day operations. It does this by identifying and prioritizing the issues and risks, identifying the complex interdependencies that exist between workstreams, managing the communication process with the stakeholders and making decisions on behalf of the project sponsors. In terms of executing the work, the PMO does not handle that. That responsibility resides with the individual workstreams. For a digital supply chain transformation, examples of workstreams would include Demand Planning, Supply Planning, Inventory Management, Integration, Master Data Management, etc. When designed and set up correctly, the PMO provides a competitive advantage for firms undergoing a transformation. 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). The focus of this chapter is to highlight the specific challenges of the PMO and how the team can solve them.

Key Terms in this Chapter

Interdependencies: The relationships among tasks in different workstreams which determine the order in which activities need to be performed. Relationships between activities in the same workstream are dependencies, but if the activities are in different workstreams, they are referred to as interdependencies. There are four types of dependency relationships: finish to start, start to start, finish to finish, and start to finish.

Integrated Change Control: Process performed by the PMO to evaluate new requirements or enhancements and then determine if they will be added to the scope of the project.

Program Management Organization (PMO): A team of project managers and staff responsible for the centralization and coordination of the entire project. PMO can also stand for project management office when the project has a smaller scope and it can stand for Portfolio Management Office when the PMO is managing multiple projects or programs at the same time.

Project Management Body of Knowledge (PMBOK): A very comprehensive set of project management best practices published by the Project Management Institute. The PMBOK is the definitive standard for establishing and running PMOs.

Workstream: A work package of the project with its own resources, scope and objectives. Workstreams are the major components of a work breakdown structure. Typical workstreams for a digital supply chain transformation include demand planning, supply planning, inventory management, change management master data management, and integration.

Critical Path: The series of tasks that must finish on time for the entire project to finish on schedule. Each task on the critical path is a critical task. A project can go no faster than the critical path.

Integrated Project Plan: Document that contains all the activities necessary to perform the transformation. Typically, each workstream has its own project plan, but they are integrated into a single plan by the PMO.

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