Accenture Strategy

TMO is not PMO with a facelift

April 8, 2019

Digital disruption is not new news. It is the daily reality of Media & Technology companies. Some are the disruptors and others are disrupted. All understand that digital transformation—not evolution—is required to maintain a competitive edge. However, 70 percent of all digital transformation initiatives do not reach their goals. Moreover, of the $1.3 trillion that was spent on digital transformations last year, an estimated $900 billion went to waste.¹

Accenture momentum transformation platform

With so much on the line, media and technology companies need to shift their approach to ensuring they reap business value and desired business outcomes from digital transformation initiatives. Across industries, 93 percent of organizations report using standardized project management practices such as a traditional Project Management Office (PMO).² But digital transformation requires more than status-tracking and risk escalation—it requires a robust capability that drives execution with a value-realization focus: a Transformation Management Office (TMO). This is not just semantics, not just a lift-and-shift, not just a PMO with a facelift. It is a truly different undertaking to ensure digital transformations deliver on their promise.

Three out of four businesses do not feel confident in their ability to execute a transformation.³ A well-executed TMO can improve that confidence via a comprehensive approach across four areas: value, design, execution and business adoption. Think of TMOs as a risk mitigation insurance policy on your most critical digital transformation initiatives.

A good TMO capability is muscle that companies need to maximize the value of their transformations.

A transformation office for successful reinvention

Risk #1: Value at stake

Why traditional PMO doesn’t work: It begins with an upfront value case to gain funding but stops short of the rigor necessary to ensure transformational value delivered and business outcomes realized. For example, only 13 percent of companies are getting both cost savings and new growth from their investments in digital technologies—but 80 percent of executives want new efficiencies, new growth and new experiences to be delivered at the same time.⁴

Using a TMO ensures early alignment between business, finance, and delivery leaders, creating a strong tie between the value case and transformation execution. With a TMO capability, value defined translates to value committed and realized.

Risk #2: Misaligned solutions

Why traditional PMO doesn’t work: It ignores key components of business design. PMO defaults to a lift-and-shift model based on how the organization operates today, versus business models driven by how the organization should pivot to achieve target outcomes.

A TMO operates in a “target state/outcome” model with a ZBx mindset, where the business looks at where it needs to invest for new outcomes versus what has worked historically. Accenture research has found that 81 percent of Rotation Masters—enterprises achieving the highest sales and EBITD growth from a wise pivot – consider that moving beyond their existing business models is vital to cementing future leadership positions in their industries.⁵

Risk #3: Delivery delays

Why traditional PMO doesn’t work: It over-indexes on status reporting and tracking, failing to draw insights and drive rapid decision-making to ensure the digital transformation stays on time and budget.

PMO tracks progress. TMO drives it. With the right governance and execution, TMO allows organizations to push through the complexity of intersecting workstreams, multiple stakeholders and complicated data dependencies common to large-scale digital transformations. With this approach, the TMO can ignore the noise and focus on what matters: directly tying execution to design and value.

Risk #4: Poor adoption

Why traditional PMO doesn’t work: It underperforms on change management, underestimating the importance of managing the human elements of major changes. In fact, emotions have a huge impact on the benefits realized from a digital transformation program. High levels of fear and frustration can result in a decline in benefits realized by more than 20 percent, while a high level of passion and drive can lead to an increase of 50 percent.⁶

A well-designed TMO knows human-centric design and journey management are essential. In our experience, if companies must choose between reducing scope or eliminating change management, they are far better off reducing scope. A good TMO brings impacted stakeholders on the change journey so that a well-executed transformation actually delivers the desired business outcomes.

Beyond the ZBB Buzz

Shifting into transformation gear

In a digital age where transformation is essential to maintain competitiveness, a good TMO capability is muscle that companies need to maximize the value of their transformations. TMO means more than just checking the boxes and managing deadlines—it means shifting your company’s frame of reference completely to one that emphasizes realization of value and business outcomes through transformation.

The end game has shifted—and it will take more than "PMO 101" to play this one well. When undertaking a digital transformation—investing in a TMO ensures that organizations have the best game-plan, the right coaching and the top players needed to get across the goal line.

¹ Harvard Business Review, "Digital Transformation Is Not About Technology", March 13, 2019

² Project Management Institute, “Success in Disruptive Times: Expanding the Value Delivery Landscape to Address the High Cost of Low Performance”, 2018

³ Progress, “Are Businesses Really Digitally Transforming or Living in Digital Denial?”, May 2016

⁴ Accenture, “Industry X.0 Combine and Conquer: Unlocking the Power of Digital”, 2017

⁵ Accenture, “Make Your Wise Pivot to the New”, June 14, 2018

⁶ “Big Change, Best Path: Successfully Managing Organizational Change with Wisdom, Analytics and Insight”, Kogan Page, 2015