02/02/2021

PMO Evolution for Digital Primer for 2021

Peer & Practitioner Research Published 1 February 2021 - ID G00736842 - 9 min read

By Analysts Lars Mieritz, Daniel Stang, Robert Handler

Initiatives: PMO Evolution for Digital

PMO evolution for digital addresses the changes in PPM practices, capabilities and
tools required to support organizations as they mature digitally. This includes
demand prioritization, enterprise transformation and EPMO, PPM tools and solutions,
as well as resource management.

Scope
This initiative encompasses practices and tools required to enable initiative and portfolio management
to maximize portfolio value. As new digital business practices emerge, the PMO role must adapt.

In addition to program and portfolio management leaders and business leaders, other IT roles involved
in this initiative are:

■ Applications and software engineering leaders

■ Chief information officers

■ Infrastructure and operations leaders

Topics covered include:

■ Demand prioritization: This provides the mechanisms by which organizations collect and manage
demand, and progress ideas and requests for new initiatives, whether programs, services, projects or
products.

■ Enterprise transformation and EPMO: This enables the establishment of enterprise-level PPM
capabilities to lead and enable business evolution, and to balance portfolio decisions for delivering
strategic value realization.

■ Portfolio management: This optimizes and balances the selection, prioritization and performance or
value of project, program, service, asset and/or product investments in alignment with the
organization’s strategic objectives.

■ PPM tools and solutions: This includes the selection, deployment and management of existing tools
or new disruptive tool platforms that enable stakeholder transparency into program, product, project

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and portfolio management, and value delivery.

■ Resource management: This enables efficient and effective management of an organization’s

resource capacity, allocation, utilization and team formation across the organization’s initiatives and
objectives.

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Analysis

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Figure 1. PMO Evolution for Digital Overview

Digital business is here to stay. In our 2021 CIO survey, 48% of CIOs reported being digitally mature and
only 2% reported no digital initiative. 1 CEOs were more likely to accelerate their digital initiatives than to
slow them down by a ratio of 5-to-3. 2 The rationale for accelerating digital business during a global
pandemic is clear — beyond enabling organizations to work in new often remote ways, it has proven to
CEOs and boards that the enterprise’s path to the future runs through IT. This demonstrates that senior
management clearly understands the advantages of digital business during turbulent times. As such,
PPM leaders must evolve their function as their organizations advance their digital maturity.

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The basis for any project management office (PMO) evolution is a solid foundation. Basic building
blocks such as charters, best-practice policies, a grasp of the stakeholder community, and relationship
management, as well as an overarching leadership vision, must be in place. The initiative for program
and portfolio management leaders addresses these topics.

The sheer increase in the number of digitally mature organizations means PPM leaders must stay aware
of the latest trends, tools and techniques. They must ensure their function has the mindset, practices,
services and supporting technologies relevant for the digital age. As digital business evolves,
organizations must too — learning to continually adapt to an accelerating pace of change. New
technology introductions happen faster. Adaptive methods for technology and business (such as digital
product management and agile) pervade most organizations. The focus of portfolio management can
no longer be isolated to silos of projects, products, applications and services, as previously clear lines of
demarcation between them blur. Business leaders must understand and manage dependencies and
make decisions across new integrated business models.

Enterprise portfolio management continues to evolve as an enterprise function that balances

investments, priorities and resources. Organizations need portfolio management more than ever to
decide what to start, stop, continue, consolidate or change. Until recently, initiatives using newer, agile
methods had been outside the purview of conventional portfolio management. Considering the attention
given to cost optimization, and the increasing use of agile methods, allowing unchecked resource
consumption based solely upon the delivery methods applied is not sustainable.

Topics
To support digital business, PPM leaders must be proactive. New and evolving demands necessitate that
PPM leaders partner with business leaders, finance and resource managers to balance investments
across a diverse set of internal and external initiatives, products and services. To support the digital
journey, PPM leaders must adapt their function to a much faster moving and more complex
environment. They can accomplish this with the appropriate practices, tools, skills and approaches to
meet business goals and priorities and to maximize the value of the portfolio and the potential of
available resources.

Our research centers on the following topics:

Demand Prioritization
Organizations struggle to balance the demand for digital transformation with the need to keep
operations running. Implementing responsive and effective demand channels across a variety of digital
business practices (products, services, programs) will become imperative for managing sustainable
continuous change in the digital era.

Questions Your Peers Are Asking

■ How do I manage a variety of demands from multiple sources?

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■ How do I support the prioritization of competing demands?

■ How can I make my demand management more efficient?

■ How is demand management handled in the digital business?

Recommended Content
Some recommended content may not be available as part of your current Gartner subscription.

■ Depoliticize Project Prioritization With a Decision Framework

■ Establish a Tailored Demand-Planning Process for Event-Driven Demand

■ EPMO’s Role in Managing Innovation-Driven Demand

■ Streamline Your Project Initiation Processes for the New Normal

Planned Research
■ Managing demand channels for better outcomes

■ Devolved and distributed demand management

■ Incorporating customer feedback to improve demand management

■ Revisiting demand intake processes from the perspective of stakeholders

Enterprise Transformation and EPMO

Enterprise PMOs (EPMOs) will evolve beyond tactical planning and operational delivery, emphasizing
strategy execution, performance and new practices such as the shift to products and multimethodology
delivery. Existing PMOs will either become or learn to interact with EPMOs that help organizations evolve
from successful enterprise transformation and to ongoing strategy execution through strategy
realization offices (SROs).

Questions Your Peers Are Asking

■ How can I transition to/establish an EPMO?

■ How can PMO/EPMO/program management enable enterprise transformation?

■ How does an EPMO transition to a strategy realization office for the enterprise?

■ How can we manage change?

Recommended Content
Some recommended content may not be available as part of your current Gartner subscription.

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■ Survey Analysis: Follow the Lead of EPMOs in Digitally Mature Organizations to Enhance
Performance

■ PMO as a Change Enabler in Digital Business: How PMOs Can Help Portfolio Decision Makers,
Business Leaders and Employees With Successful Change

■ PMOs Can Deliver Faster Results With Business Engagement in Agile

■ Optimize Outcomes With Program Management Across Product Lines

Planned Research
■ Transforming the EPMO to support execution of digital strategy

■ Plans and actions to get the strategy realization office up and running

■ Building EPMO capabilities for supporting enterprise change

■ Exploring ways to enable the PPM ecosystem

Portfolio Management
With digital business and the proliferation of agile and product constructs, there is a renewed interest in
portfolios and portfolio management. Portfolios are increasing in popularity because they explicitly
address interdependencies across strategic investment priorities and planned business outcomes.

Questions Your Peers Are Asking

■ How do I enable portfolio decisions that balance risk, cost and return?

■ How do I integrate and balance across a variety of portfolios that are often different in structure and
objective?

■ What approaches can we adopt to expedite the evolution from a single- to multimethodology
portfolio?

■ How can I enable strategic portfolios that continuously adapt to market changes?

Recommended Content
Some recommended content may not be available as part of your current Gartner subscription.

■ Extending the Project and Product Ecosystem to Lean Portfolio Management

■ 3 Priorities for the Enterprise Portfolio Management Office During Turbulent Times

■ 6 Practices for Effective Portfolio Management

■ 3 Steps to Managing Distributed Portfolios in an Increasingly Digital World

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Planned Research
■ Survey Analysis: Proven portfolio practices that make a difference

■ Portfolio management and accommodating hybrid delivery

■ Dynamic and lightweight portfolio reprioritization processes

■ Portfolio decision making and the role of the PMO

PPM Tools and Solutions

The PPM tools found in many enterprises may not lend themselves to rapid change or agility, nor do they
necessarily support leaner project, product and portfolio methods. PPM tool platforms will continue to
evolve as newer and more sophisticated technology (e.g., robotic process automation [RPA], artificial
intelligence [AI]) is being sought to supercharge these platforms.

Questions Your Peers Are Asking

■ What tools exist to support strategic portfolio management?

■ What tools exist to enable adaptive project management and reporting?

■ What considerations should I account for when selecting the right tool for my PPM needs?

Recommended Content
Some recommended content may not be available as part of your current Gartner subscription.

■ The PPM Market Now Supports Strategic Portfolio Management and Adaptive Project Management

■ What to Consider When Selecting PPM Tools

■ Market Guide for Adaptive Project Management and Reporting

■ Magic Quadrant for Integrated IT Portfolio Analysis Applications

Planned Research
■ Avoiding pitfalls when implementing PPM solutions

■ Critical Capabilities for Strategic Project and Portfolio Management

■ Magic Quadrant for Strategic Portfolio Management

■ Expedite resource and capacity management analyses with PPM tools

Resource Management

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Traditional resource management practices have not been sidelined by agile, and now prove to be
foundations to build upon as digital business evolves. PPM leaders must increase their resource
management vigilance as work dynamics shift by transcending coarse-grained resource capacity
planning and by thinking differently to deliver greater productivity to meet digital business demands.
PPM leaders must also extend their expertise to enable talent management, helping with talent
acquisition and development as digital evolves into new domains devoid of surplus talent.

Questions Your Peers Are Asking

■ How do we get the most efficient and effective use of our scarce resources?

■ How do we evolve resource management practices to enable change in our digital business?

■ How do we do resource management or capacity planning in a hybrid environment?

■ How do we support the need for scarce digital talent?

Recommended Content
Some recommended content may not be available as part of your current Gartner subscription.

■ Resource Capacity Planning for PPM Leaders: Crawl Before You Walk

■ How PPM Leaders Can Best Staff Initiatives in a Matrixed Environment

■ How PPM Leaders Can Help Resource Management in Product Teams

■ PPM Capabilities You Should Focus on to Support Cost Optimization Goals

Planned Research
■ Stewarding resource capacity to maximize portfolio delivery

■ Agile and the challenge of coordinating resource teams

■ Balancing the workload of project resources

■ Adapting resource management to a product-driven organization

■ Becoming a talent enabler to develop talent and enable new roles

Suggested First Steps

■ IT Score for Program & Portfolio Management

■ Evolving for Digital Business: 6 Key Roles for Today’s PMO

■ 2021 Strategic Roadmap for the PMO

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■ How to Select PPM Technologies Suiting Digital Business in a Confusing Market With Porous
Boundaries

■ Interact with Gartner analysts to identify research and Toolkits hand-selected for your unique situation
and to receive in-context advice.

■ Connect with Gartner analysts and peers to learn more at the annual Gartner Program and Portfolio
Management Summit.

Essential Reading
■ Leadership Vision for 2021: Program and Portfolio Management

■ How PPM Leaders Can Help Resource Management in Product Teams

■ Extending the Project and Product Ecosystem to Lean Portfolio Management

■ Optimize Outcomes With Program Management Across Product Lines

■ PPM Capabilities You Should Focus on to Support Cost Optimization Goals

Tools and Toolkits

■ Toolkit: Use Net Business Value and Risk to Drive Portfolio Selection

■ Ignition Guide to Conducting Portfolio Review Discussions

■ Ignition Guide to Resource Capacity Planning

■ Toolkit: RFP Template to Select Adaptive Project Management Software

Evidence
1
The 2021 CIO Agenda: Seize This Opportunity for Digital Business Acceleration

2
2020 Gartner CEO Survey: The Year of Recession

Document Revision History

PMO Evolution for Digital Primer for 2020 - 24 January 2020

Portfolio and Resource Management for Products and Projects Primer for 2019 - 7 February 2019

Portfolio and Resource Management for Products and Projects Primer for 2019 - 7 February 2019

Evolving Portfolio and Resource Management Primer for 2018 - 1 February 2018

Applying Project Portfolio Management With Scarce Resources to Optimize Business Value Primer for
2017 - 9 January 2017

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Applying Project Portfolio Management With Scarce Resources to Optimize Business Value Primer for
2016 - 20 January 2016

Related Priorities

Initiative Name Description

Program and This initiative focuses on functional design and talent strategies to enable PPM leaders
Portfolio to evolve the enterprise’s capabilities in order to successfully deliver digital business
Management outcomes.
Leaders

Enterprise Enterprise architecture, as a discipline, must help organizations prepare for a

Architecture composable business that requires dynamic adaptability, while remaining resilient amid
ongoing uncertainty.

Application and Gartner’s research for application and product portfolio governance provides best
Product Portfolio practices and insights to help accommodate present and future demand.
Governance

CIO: Strategy, To be fit for digital and composable business, strategy and governance must become
Governance and adaptive and continual, and operating models must become more tightly integrated
Operating Models and agile to accelerate execution.

IT Cost Gartner explores how IT financial management must evolve to create an agile and
Optimization, innovative environment (value), with proper risk trade-offs for better decision making
Finance, Risk and and desired business outcomes.
Value

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