Agenda For Program and Portf 229180 PDF

This research note is restricted to the personal use of Andre Cortines Peixoto : andre.peixoto@gartner.com.
G00229180
Agenda for Program and Portfolio

Management, 2012
Published: 27 February 2012
Analyst(s): Donna Fitzgerald
Gartner's 2012 program and portfolio management research will examine

trends in the program management office, as well as techniques for better
portfolio management. Use this overview to more effectively define value,
develop talent, and adapt to change in new and innovative ways.
Analysis
Figure 1. Program and Portfolio Management Agenda Overview
Source: Gartner (February 2012)
Often, PPM leaders (that is, program management office [PMO] or enterprise program management
office [EPMO] heads, program managers or portfolio managers) spend much of their time reactively
coping with daily project and program challenges and setbacks. A continued focus on crisis
management will prevent PPM leaders from adequately addressing the increasing winds of change.
The research planned for our 2012 PPM agenda will focus on strengthening leadership and
developing more flexible processes to keep pace with change, and on delivering a more constant
stream of value more quickly. It will examine trends in the evolution of the PMO and provide advice
on how to practice adaptive program management that supports the organization in executing its
strategy.
In the famous 1939 movie "The Wizard of Oz," a Kansas farmhouse containing a young girl is
picked up by a tornado and transported to the land of Oz, where things don't work quite the same
way they did in Kansas. For many PPM leaders today, there's a feeling that, even though they are
currently safe in their "houses," the winds of change are increasing in velocity. Maybe they've
already been caught by the tornado and just don't know it, because they haven't yet set down in the
midst of their "new normal" (which might as well be the land of Oz for the differences we believe it
will encompass).
Over the years, we've noticed a recurring pattern in the phenomenon of incipient change. The
prognosticators claim to see signs of something big, new and different on the horizon, yet the time
between the initial forecast and the ultimate event is long enough that, when it occurs, to the
average person it seems to come without any warning at all.
In 1989, Peter Drucker wrote a piece for The Futurist Magazine called "The Future That Has Already
1
Happened." In the article, Drucker lists events such as continuously increasing life spans that
would ultimately result in the need to increase the retirement age for pension eligibility. While the
trend was clear to Drucker in 1989, its inevitability obviously wasn't equally clear to the average
worker in France, many of whom in 2010 expressed surprise and outrage when confronted with a
proposal to raise the retirement age from 60 to 62.
Drucker also said, "Knowledge makes resources mobile" and, by extension, knowledge makes jobs
mobile. The Economist recently reported, "Private-sector job growth in the U.S. has slowed
2
dramatically, and come to a halt in industries that are exposed to global competition." The
Economist also pointed out that median annual income in the U.S. grew by an anemic 2% between
1990 and 2010. Much of what we see today is simply the realization of trends that started in the
distant past and are only now becoming undeniable.
ln the practical world of PPM, Gartner believes that we are at the cusp of an event-driven, cyclical
correction. But due to the demands of our workload, it's become much too easy to get caught in
the familiar trap of focusing our attention on day-to-day events in our "own house" instead of
looking out the window to see if the winds of change are blowing in our direction. In 2012, we will
focus on the areas you need to understand in order to survive the tornado in your organization, land
safely and continue to live well in Oz (aka the "new normal").
Page 2 of 9 Gartner, Inc. | G00229180
Key Issues
■ How can enterprise PPM leaders coordinate and manage governance and stakeholders across
the enterprise to ensure strategy execution?
■ How do heads of PMOs identify, build and develop the skills and staff required for highly
effective project and program leadership?
■ How will PPM leaders introduce the flexibility necessary to produce results their organization
desires in their current standard set of processes and tools?
■ What should PPM leaders do to define value across all PPM deliverables?
■ What should PPM leaders do to effectively innovate and manage organizational change in order
to be successful in a highly uncertain environment?
How can enterprise PPM leaders coordinate and manage governance and
stakeholders across the enterprise to ensure strategy execution?
Since we published our first research on enterprise program and portfolio management (EPPM) in
2009, we have had a steadily increasing stream of calls from clients asking how to handle the issue
3
of governance and stakeholder management across the enterprise. We see this trend continuing to
grow, primarily because more and more programs require the involvement of elements of the entire
business.
We have also started to hear from our public-sector clients that their needs are no longer limited to
just their own organizations. With pressure to cut costs, they are now beginning to investigate how
to combine services and deliver projects and programs across not only their organization, but other
geographically colocated organizations as well. What is particularly interesting about this trend is
that it is crossing functional lines, resulting in such things as shared services between nonteaching
hospitals, community colleges and universities. The drivers of these actions seem to be budget cuts
(which have always been with us), but what makes it practical to do today is the evolution of a
variety of new approaches (drastically simplified business processes, combined with easy-to-use
software as a service [SaaS] software). According to our clients, the goal is to free up money to
support future mission-centered innovation that is being starved out by the costs of simply running
4
the business.
Planned Research
To support these trends, we'll be researching such topics as how to foster a positive stakeholder
mind-set among project participants, and the relationship between functional PMOs and the
enterprise program management office (EPMO). This year, the intersection of business process
management (BPM) and PPM and how to combine them to ensure that the final mix of technology
and process is optimal is a topic we'll be exploring. We'll also continue our ongoing work on how
organizations at different maturity levels and in different market circumstances can continue to
improve their efforts toward strategy execution.
Gartner, Inc. | G00229180 Page 3 of 9
How do heads of PMOs identify, build and develop the skills and staff required for
highly effective project and program leadership?
The volatile, uncertain, complex and ambiguous environment in which we operate today calls for a
re-emergence and evolution of the concept of PPM as a leadership role. Over the past 15 years,
project and program managers have slowly moved from being perceived as leaders and are now
often viewed as facilitators and coordinators focused solely on tracking execution. We don't see
this latter model as effective to deal with the increasing need for projects and programs to deliver
significant value in increasingly shorter periods of time.
Luckily, for most organizations, this is one area where small, focused changes in approaches and
hiring can yield significant impact. Not every project or program manager (PM) needs to be a leader,
but some do and they need to be equipped to lead now. For the rest of the organization, the
message is simply that leadership is a desired quality and that the ability of leaders to deliver results
(as opposed to just fill out paperwork) will ultimately be a key criterion for success.
Planned Research
In 2012, we will explore the implications of our recent Strategic Planning Assumption, "By 2016,
demand for agile project leaders — blending project and change management skills with domain
expertise — will increase by 75%"(see "Predicts 2012: PPM Leaders Must Embrace 'The Next
Normal' by Embracing Changes and Adapting"). What this means in classic PPM language is that
we will be increasingly looking at the "soft skills" related to PPM. Soft skills include communication
skills, emotional intelligence and leadership styles. We will also offer advice on how to help PMs
develop a broader vision about the scope of their responsibilities. Finally, we will examine ways to
help move the current PPM culture toward a model that makes cultivating project leaders a little
easier. We'll also be adding to our body of research about the increasing importance of program
management and continuing our exploration of the role adaptive program management can have in
reducing the persistent feeling of change fatigue that organizations have been reporting. Finally we'll
continue with our analysis of survey data, exploring such areas as PMO staffing, maturity, metrics
and roles.
How will PPM leaders introduce the flexibility necessary to produce results their
organization desires in their current standard set of processes and tools?
In 2012, we will be updating and expanding our 2011 PPM Market Universe research to help
articulate what this broadening of the population of prospective PPM tool purchasers means to an
organization. In many ways, it's not just about IT anymore when it comes to practices, processes
and tools. Marketing and new product development need project management just as much as IT,
but what has worked for IT isn't what they want, and they are starting to drive changes through the
organization back into IT.
Processes have been the primary "silver bullet" in the toolkit of most PMOs ever since the first PMO
was organized. The mantra to date has been consistency equals results. Now, after almost 15 years
5
of invested effort, it's becoming clear that merely following a process doesn't accomplish much of
anything. It just produces paperwork. To help with this issue, we will also be exploring what makes
a good method in general and what makes good methods in particular regard to project, program
and portfolio management. Our focus will be on the concepts to help PMO leaders tailor what they
have to more closely meet future needs that will demand more agility to adapt.
Planned Research
In 2012, we are planning to explore what makes a good process in general and what makes good
processes specifically with regard to project, program and portfolio management. Our focus will be
on the concepts in order to help you tailor what you currently have to more closely meet the needs
of a future that will demand more agility and flexibility. Specifically, we will explore how PMO
leaders can:
■ Develop processes that expect change versus creating obstacles to addressing it.
■ Conduct projects and programs with high uncertainty in the requirements and the environment.
■ Borrow from lean concepts to optimize PPM process.
■ Be agile on large programs (which we call adaptive program management).
■ Our software tool coverage will consist of updates and expansion to our PPM Market Universe
reports, consisting of a wide range of solutions and vendors, and including initial coverage of
service provider offerings.
What should PPM leaders do to define value across all PPM deliverables?
The key to understanding how to deliver value is to begin with the assumption that value, like
beauty, is always in the eyes of the beholder, and that all forms of value are not created equal. In a
project context, there are generally four different value perspectives: the sponsor's, the
stakeholder's, the team's, and the perspective of the ultimate consumer of the product or services
the organization makes/delivers. Amid these various perspectives, every PM knows it's possible to
deliver a project on time, on budget and with all of the specified requirements, and still be met with
6
a scathing assessment of failure.
Given how nebulous value is as a concept, one of the most important things any program manager
can do is to begin to understand how to identify and then communicate all of the objectives that are
often brought to bear on a project or program. While this is classically thought of as stakeholder
management, our experience has been that, in situations where the program begins to suffer from
"eroding goals" (see Note 1), the root cause is rarely the stakeholders. Instead, the root cause is the
failure of the program manager and, by extension, the program team to stay focused on the specific
results that will deliver value and measurable benefits. Stakeholders always ask for what they want.
The program team needs to deliver what the organization needs. Often, these are two different
things.
Planned Research
In 2012, we will be exploring what value means and how PMO leaders and program managers can
measure it in a way that actually aids in delivering the value desired. The specific research will
include how to manage programs to deliver a constant stream of value (as opposed to "big bang"
approaches). We will also address how to measure value's contribution to the business strategy as
opposed to forcing everything into financial terms, and how to do value-based planning to ensure
that the right projects and programs are included in the portfolio.
What should PPM leaders do to effectively innovate and manage organizational

change in order to be successful in a highly uncertain environment?
In 2011, PMO leaders began telling us that the impact of change fatigue was beginning to permeate
7
everything around them. Their PMs felt pulled in too many different directions, and getting time and
attention with subject matter experts or sponsors was nearly impossible. Additionally, with all the
changes going on around them, stakeholders were beginning to push back on even the concept of
adding more change from a new project or program. If we add to this the business's need to
8
increase its level of innovation, it begins to sound like a recipe for disaster.
Fortunately, PMO leaders can moderate much of this change pressure by dealing with it as part of
the PPM life cycle. Through the portfolio process, it is possible to measure the potential impact of
change on stakeholders and ensure that projects are time-sequenced accordingly. It is also
possible to incorporate more concrete change management work into projects to ensure that how
things get done is as important as what gets done.
Planned Research
In 2012, our research plans include focusing on helping PMOs and program offices improve their
knowledge of change management (CM), including when to incorporate CM into projects and
programs, how to evaluate the efficacy of the CM plans, and how to ensure that the communication
surrounding the changes taking place is effective.
To help deal with issues around change, our research will focus on dealing with change fatigue,
developing sound change management plans as part of projects and programs, and giving tips on
how to measure change resiliency in stakeholder communities.
Related Priorities
Key Initiatives address significant business opportunities and threats, and typically have defined
objectives, substantial financial implications, and high organizational visibility. They are typically
implemented by a designated team with clear roles, responsibilities and defined performance
objectives. Table 1 shows the related priorities.
Table 1. Related Priorities
Key Initiative Focus
Program and Portfolio Program and portfolio management (PPM) is a discipline that is central to
Management helping an organization realize its strategy, develop its core business
capabilities and optimize investment in IT projects.
Program and Portfolio The role of program and portfolio management (PPM) leaders is to produce
Management Leaders defined and agreed-on deliverables that are of maximum business value and in
line with an organization's strategic goals and needs.
Source: Gartner (February 2012)
Recommended Reading
Some documents may not be available as part of your current Gartner subscription.
"Toolkit: Stakeholder Analysis Template"
"How to Apply Six Persuasion Principles to Advance Your PMO"
"Developing and Using Stakeholder Analysis to Build Support for a PMO"
"Skills and Competencies for Portfolio Management"
"Resource Capacity Planning for Portfolio Management: Crawling Before You Walk"
"Defining the Adaptive Program Management Life Cycle"
"Predicts 2012: PPM Leaders Must Embrace 'The Next Normal' by Embracing Changes and
Adapting"
"Defining EPPM and Determining When It Matters"
"Strategy Maps and PPM Dashboards: Linking Strategy With Tactics"
Evidence
1 "The Future That Has Already Happened," Peter Drucker, The Futurist Magazine, November 1989.
2 "This Time It's Serious," The Economist, 18 February 2012 (www.economist.com/node/21547770?

fsrc=scn/tw/te/mt/thistimeitsserious).
3 We have received more than 175 calls in the past 18 months to discuss how to handle competing
priorities at the enterprise level and, by extension, how an EPMO might facilitate resolving some of
the issues.
4 This conclusion is based on more than 1,000 client discussions from 2008 through 2011.
5 The cumulative results of the ongoing Gartner PPM maturity assessments show that the average
client organization has an aggregate maturity of 2.8. In 2010, PM Solutions' annual "State of the
PMO" report also showed that 64% of all PMOs surveyed were still stuck at Level 1 or 2.
6 Scott Ambler conducted a survey for Dr. Dobbs of 203 respondents to determine how success for
IT projects is defined. He found that only 10% of the respondents indicated that "on time, on
budget, to specification" was the success criterion they used to judge IT projects. See the 2010 IT
Project Success Survey at http://drdobbs.com/architecture-and-design/226500046.
7 From October 2009 to June 2011, our collective team has averaged more than 10 client questions
a month on some aspect of change management. In more than 70 of these inquiries, broad
organizational change was an important issue. Additionally, at our 2011 summits, 25% of attendees
chose to attend a change management session.
8 The 2011 and 2012 CIO surveys conducted by Gartner show innovation as one of the top five
priorities for IT organizations. "Amplifying the Enterprise: The 2012 CIO Agenda" points out a trend
toward providing ways in which innovations and improvements created anywhere in the enterprise
can be "amplified" throughout the enterprise.
Note 1 Eroding Goals

Peter Senge identified 10 system archetypes that account for many of the recurring patterns of
dysfunctional behavior we often see in organizations. Of these archetypes, "eroding goals"
describes a situation where over time the reason why a program was begun in the first place gets
lost and is replaced by the crises du jour. Sometimes these changes are appropriate, and
sometimes the changes lead to a significant decrease in value (see "The Fifth Discipline: The Art
and Practice of the Learning Organization," Peter Senge, Doubleday, 2006).
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This research note is restricted to the personal use of Andre Cortines Peixoto : andre.peixoto@gartner.com.

Agenda for Program and Portfolio

Analyst(s): Donna Fitzgerald

Gartner's 2012 program and portfolio management research will examine

Source: Gartner (February 2012)

Page 2 of 9 Gartner, Inc. | G00229180

Gartner, Inc. | G00229180 Page 3 of 9

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What should PPM leaders do to effectively innovate and manage organizational

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Table 1. Related Priorities

Key Initiative Focus

Source: Gartner (February 2012)

"Toolkit: Stakeholder Analysis Template"

"How to Apply Six Persuasion Principles to Advance Your PMO"

"Developing and Using Stakeholder Analysis to Build Support for a PMO"

"Skills and Competencies for Portfolio Management"

"Defining the Adaptive Program Management Life Cycle"

"Defining EPPM and Determining When It Matters"

"Strategy Maps and PPM Dashboards: Linking Strategy With Tactics"

2 "This Time It's Serious," The Economist, 18 February 2012 (www.economist.com/node/21547770?

Gartner, Inc. | G00229180 Page 7 of 9

Note 1 Eroding Goals

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Corporate Headquarters Japan Headquarters

European Headquarters Latin America Headquarters

Gartner, Inc. | G00229180 Page 9 of 9

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