The Rising Importance of Digital PMOs

Over the past decade, digital marketing agencies have evolved and perfected their portfolios. After many years of revolutionizing, defining, and polishing their core sets of capabilities, the majority of digital agencies have converged around the same suite of offerings.

This partially commoditized marketplace makes it very difficult for any one agency to differentiate itself from the competition. To make the situation more challenging, most agency clients – many of whom are agency veterans themselves – have become extremely well versed in all things digital and often have access to in-house experts. This experience means clients understand not only what an agency can provide, but also exactly what it takes to provide those services in terms of effort and costs.

In today’s environment, the differentiating factor among agencies is no longer how well an agency can explain its services, convey its vision, and present fancy creative storyboards. Clients have a pretty good handle on what agencies delivery and why it matters. They understand what we do and are aware that, for the most part, we all do the same things. I’d argue that today the more compelling factor is how an agency delivers, or – to be more specific – how efficiently. Clients are increasingly interested in how agencies organize themselves internally and collaborate with others to provide top-quality output in the most efficient and cost-effective manner. Operational excellence is critical and today’s winning agency is the one that can stretch the client’s dollar further through the optimization of process, technology, and teams to deliver maximum results for less.

Based on this state of affairs, I believe that the Digital Project Management Office (PMO) is more integral than ever to agency success. Project failure is simply not an option for businesses that want to win. Despite this reality, most agencies continue to operate without a centralized and strategic digital PMO. Though they may understand the value a PMO intellectually, they don’t know how to establish one. It’s not easy.

A full 50 percent of PMOs close within three years (Association for Project Management). This rate of failure stems from the fact that 68 percent of stakeholders perceive their PMOs to be quagmires of bureaucracy (2013 Gartner PPM Summit). In order to preserve their seat at the executive table, PMOs need to be strategic, not bureaucratic. All the data available online makes it easy to justify the PMO. Building the case for any agency to establish one is the easy part; taking the next step is a much bigger hurdler. Setting up a PMO that delivers amazing results and doesn’t collapse under its own promises in the first year is not an easy undertaking. Success requires a top-down approach that changes the way the agency operates on a fundamental level.

The data tells a clear story: get on board with PMO or lose your competitive edge.

Want to read the full article? Download The SoDA Report on “The State of Agency Project Management” now.

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