What Singaporean firms must know about Programme Management Office approach

As emerging markets in Asia continue to open up, global corporates are increasingly looking for ways to penetrate the region,and are developing strategies around how they can capitalise on growing consumer spending power in this market.

With excellent transport links, a well-educated workforce, attractive quality of life, a proactive business culture and strong technology connectivity, many of these businesses are choosing Singapore as a hubfrom which to base their regional expansion programmes.

However, whilst achieving future growth may be the burning platform for many of these companies, expansion cannot come at any cost. Indeed, many of these initiatives are being launched at a time when budgets globally are being reduced, property teams are shrinking and the profit and loss is under pressure. As a result, many of these corporates find themselves trying to both implement growth strategies in some parts of the region andconsolidate their property portfolio in other locations.

To help manage these issues, whilst considering time and financial implications, corporates need to look at new ways of working in the region and must consider embracingdifferent operating models.

Adopting a Programme Management Office (PMO) approach is one possible solution – this allows companies to adopt a lean, internal Clientmodel whereby a small team based in a Singapore hub define the vision, focus and governance of the programme, which is then executed by local delivery teams.

The case for a PMO approach…

When effectively and efficiently established, the benefits of a globally-integrated programme management approach can be wide ranging. It can help to reduce back-office costs, optimise both CAPEX and OPEX spend and guarantee greater consistency around brand standards, health and safety, sustainability and the final property asset that is ultimately delivered in each location.

This approach can also help to introduce more efficient workflows with less duplication of effort, create improved processes within the management team, as well as a cross-pollination of best practice approaches. Crucially, it can also help to drive increased speed to market – this is paramount for corporates and retailers as they seek to capitalise on the changing demographics that are causing major shifts in regional demands.

Some corporates, who have already successfully implemented a programme approach as opposed toa series of individual projects, have already seen demonstrable benefits. Retailers, who have generally led the way on the use of PMOs, are recognising that this approach delivers faster speed to market, enabling the stores to trade earlier, increasing sales revenues and also offering ‘more stores for less money’.

This is all made possible through enhanced procurement, the use of prefabrication, better supply chain management, identifying root causes of delay and potential risks, and adopting appropriate mitigation strategies around each of these issues.

Addressing the potential obstacles…

Adopting a PMO approach can still represent a step into the unknown for some corporates and they typically require guidance around two important themes; how to design the operating model for the PMO so that it suits their particular business and sector, and how to secure buy-in within each of the local markets where they want to operate.

Effectively addressing these issues is important particularly with stakeholders who are unfamiliar with the model and unconvinced on how it can help to drive additional value in their market. In this instance, it’s crucial that the design of the PMO is inherently flexible so that processes can be adapted to suit local market conditions and account for differences in culture, language and working practices, whilst still maintaining core process consistency.

Furthermore, companies need to appreciate the benefits that a PMO approach delivers across the life of a programme. Initial funding for a PMO could be challenged with prevailing market conditions as the investment for the initial set up of processes and governance needs to be made up front, with the value ultimately created by the PMO, derived through the efficiency and savings delivered in the implementation of the programme of works.

We typically find that for an average size regional programme, a PMO could cost around 1% of the capital spend and deliver a 10-15% capital spend reduction over the programme. As a minimum, this makes the cost of utilising a PMO approach cost neutral over the operating period, and generally provides scope to realise sustainable financial benefits.

Securing a competitive advantage…

Designing and operating a PMO is not a ‘quick win’. However, it can help to achieve future growth objectives by facilitating successful expansion, creating leaner in house teams and reducing CAPEX and OPEX spend through more productive ways of working, all of which provide a significant competitive advantage to any corporate in these prevailing market conditions.