The CIO Office and the PMO are dead... long live the SMO!

<<Originally posted in Dutch, August 19, 2019>>

 A Project Management Office (PMO) is a well-known organizational structure for managing projects. In recent years, Service Management Offices (SMOs) have also been emerging. What is the difference? What is similar? Can the one coexist with the other? And where does that leave the CIO Office?

The management of services requires an overview of all services and supervision of the way in which the services are provided. A Service Management Office (SMO) is a team that deals with that overview and supervision and ensures optimum coordination between the needs of the customer and the achievements of the service organization ('business-IT alignment', BITA). The SMO acts as a centralized management team or a Center of Excellence (see the image above this post).

 The task of an SMO

The SMO’s main concern is governing the organization’s services – not providing the governance but overseeing the management, in the sense of coordinating the managerial aspects of service delivery. As the separation of duties requires that governance and management are not part of the same team, the governance will reside with another team.

 An SMO can encompass strategic and tactical activities, but it can also include the coordination of operational tasks of – e.g. - the Service Desk. With far-reaching outsourcing, the SMO acts as a coordinating demand-supply organization.

 The SMO brings together the responsibility for overseeing the service delivery from different perspectives and at different levels. In this sense, the SMO is the binding factor for the coherent governing of that service, at the strategic, tactical and operational levels.

 This puts the SMO at the crossroads of governance and operational management.

Such an intersection already exists in the form of the highest rank in the IT service organization: the IT director or the CIO who is accountable for all tasks and achievements of the service organization. With the SMO, the accountable manager is provided with a device that puts flesh on the bones of managing the service. The SMO, therefore, takes over part of that accountability. A RACI then demonstrates in detail to what extent and for what details the SMO is responsible.

Every task area in an organization can set up its own SMO. Combining multiple task areas in one integrated SMO is then the next step to Enterprise Service Management.

The tasks of the SMO potentially cover a broad spectrum of activities:

• the service management strategy
• the service management architecture
• supervising the training of all employees regarding their knowledge of policies
• managing the functionality of the workflow tool
• initiating improvements in services and in the management system
• a wide range of operational tasks of the service manager, the quality manager, the Service Desk and others

The extent to which an SMO actually provides for all these tasks varies per organization. An SMO can therefore also have a limited task, with only part of the tasks listed.

Example. The Contract Management (CTM) process involves setting up and maintaining agreements with customers and suppliers. The most important profile for these tasks is the service manager. That profile can be ‘divided’ into sub-profiles that contribute to the achievements of CTM tasks, e.g. the purchaser profile. A broad SMO includes all these profiles. In a somewhat narrower SMO, the profiles of the purchasers reside with a separate team.

The CIO Office

Part of the service management tasks is often already housed in a CIO Office, not just the strategic part, but also tactical and operational management tasks. The same CIO Office often also houses a number of governance tasks – a risk in itself.

One of the biggest problems with these CIO Offices is the distance to the workplace. A CIO Office has a tendency to get involved in 'important' (strategic) matters. These are often issues that fall under project, program, or portfolio management. Or even better: under 'digitization of the business' or another fashionable phenomenon. Such a focus on technology change is often at the expense of the core task of IT: sustainably supporting business tasks with the help of appropriate information processing facilities.

An organization that accommodates the tasks of such a CIO Office in an SMO thus establishes the connection between the strategic and the tactical/operational tasks of the service provider. The result is that the organization will be placed more firmly on the ground, and thus better meet the practical needs of the business. 

Such a combination comes with a warning: from the perspective of segregation of duties, it is important not to place too many tasks in one hand. Within an SMO, care must be taken not to mix specification and realization of IT services. It is important that the specification of required services stays the responsibility of a team that represents the business, leaving the realization to the SMO. That rule already applied to all other situations and organizational structures, so there is nothing new under the sun. 

The Project Management Office (PMO)

Process-oriented organizations that have a Project Management Office (PMO) and want to set up an SMO can integrate the tasks of the PMO into the SMO. After all, project follows process - or rather workflow. 

This way a project-based approach is part of the regular process-based approach. Projects do not exist alongside processes but are ways to execute activities in processes. Projects should only be used if the approach adds value, compared to a non-project approach, and as long as the project does not affect the agreed services in a negative way... 

The majority of the service organization’s activities is not executed as a project.

Apparently there are criteria to be met before a project approach is selected. We all know what these criteria can be:

• high cost
• a lot of complexity
• many organizational units are involved
• etc.

Each organization determines its own demarcation line for selecting a project approach for an activity. All projects fit into the process-based management system of the service organization. The SMO ascertains that the organization’s achievements are aligned with the services that are agreed with the business. Project managers are simply staff from existing teams. An organization that frequently applies projects can then assign the qualified resources to one dedicated team. This team provides project managers upon request, but always within the process-based management system.

The need for a PMO is now gone.

A process-based organization that sets up an SMO therefore no longer needs a PMO. In fact, the focus on services reduces the concept of a project to a useful instrument - to support the services. But the customer and the continuity of services are now core and not the change that is related to projects. 

This post is based on USM – the Unified Service Management method. USM enables process-oriented organizations to adopt a thorough service management architecture and a standardized service management system. USM is owned and managed by the SURVUZ Foundation. Details are available on the USM portal.