Dictionary.com defines “modus operandi (M.O.)” as a “mode of operating or working” or “one’s usual way of doing something.”
Does your organization have an M.O.? Does your team? Is there any alignment between corporate and team-level M.O.s? Should there be?
The short answer is: It depends. The key consideration is what you’re standardizing on. While standardized, structured processes can be good, if the structure in place is too heavy or misused, it can lead to friction, low morale, lost productivity, and diminished customer value.
Evolution of the PMO
It is within this context of structured processes and optimization that the evolution of the portfolio management office (PMO) represents such a central theme for enterprises. Traditional PMOs were focused on managing IT resources and budgets and tracking execution against plans.
As a general rule, the bigger and longer the scope of the plan, the less likely things were to actually go according to plan. The limitations of this approach are evident in many of the stats we see:
- 78% say the disconnect between IT and the business results in significant costs.[1]
- 78% fail to scale and sustain their digital transformation.[2]
However, in spite of the limited results, the PMO remained the M.O. for many organizations for decades.
In recent years, executive portfolio management offices (EPMOs) have begun to emerge in enterprises. Generally, the EPMO has been based outside of the IT organization, and was tasked with managing all bodies of work across the enterprise. This work can include the creation of products and services, and the support of such initiatives as diversity, equity, and inclusion (DEI). Given their broader charters, EPMOs have taken a higher level, less granular approach to overseeing plan execution.
Introducing the VSMO
While the EPMO has started to deliver value in many organizations, a new discipline is emerging that represents the culmination of the PMO’s evolution: the value stream management office (VSMO).
Through the establishment of the VSMO, organizations can finally connect what have been persistent silos within the enterprise: application delivery, IT operations management, and planning. By uniting these areas, organizations can establish unprecedented transparency and trust. Finally, business outcomes can fully drive alignment.
Why 2022 Will Be the Year of the VSMO
For today’s digital enterprises, VSM is integral to addressing imperatives for fast transformation and innovation. Value streams are becoming mainstream, setting the foundation for the VSMO. Consider the following statistics from the VSM Consortium:[3]
- Approximately 50% of organizations now have specific roles aligned with value streams.
- Respondents in 50% of organizations say they must implement VSM platforms within two years to maintain their competitive advantage.
- Product-centric teams are becoming more popular, with 40% of survey respondents working in product, feature, component, or stream-aligned teams versus 17% working in traditional project-focused teams.
Fundamentally, it is the “management office” that should be leading enterprise value streams. These offices have experience directing cross-functional initiatives and they’re well qualified to set the right standards for product and service creation. Given that, we expect to see the establishment of VSMOs to pick up steam in a lot of enterprises in 2022.
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Conclusion
Through establishing a VSMO, teams will be well positioned to gain better alignment around key business outcomes—and realize those outcomes. To learn more, be sure to watch our webinar, “PMO, EPMO, VSMO…What’s your MO?”
[1] Harvard Business Review Analytic Services, in association with Broadcom, “BizOps: Connecting IT to Business Outcomes,” June 2020
[2] Everest Group, “78% of Enterprises Fail to Scale and Sustain Their Digital Transformation Initiatives,” July 2018
[3] VSM Consortium, “The State of Value Stream Management Report 2021”
