Here’s how one energy company is using a project management office to its advantage during the economic downturn.
To weather the turbulent times, Orlando, Florida, USA-based Siemens Energy, a division of Siemens AG, is putting more responsibility in the hands of its project management office (PMO). And the effect has been a better use of skills and smoother decision-making processes.
“I don’t know that we could have handled the economic downturn as well without the PMO,” says Dennis Peters, who, served as the PMO lead for Siemens Energy before moving on to head a US$40 million project for the company. “Before we had [the PMO] in place, decision-making regarding the selection of projects and services was much more cumbersome, and the results weren’t defensible when challenged because the decisions were based more on emotion than fact.”
The company launched its PMO in October 2006, assigning it several key responsibilities:
- Accountability for more than US$1 million in projects
- Project management mentorship for all project managers
- Portfolio management
- IT operations management
- Fiscal year planning
- PMO project services
- Strategic personnel planning
But the recent economic climate has forced the PMO to rethink how it works.
“We have an [organization-wide] selling, general, and administrative cost-reduction mandate of 10 percent in our business,” says Mr. Peters. “This has not necessarily translated in changes to the goals of the PMO itself, but it has changed the limits of what we can accomplish and has made us become more creative in how we execute our goals.”
There is additional emphasis on outsourcing and strategic planning and using everyone’s skill sets, he says. The PMO has also started to leverage a global resource model. It not only shares work between departments and regions within Siemens Energy, but the team also leverages off-shore third-parties more significantly.
Reducing project budgets is on the agenda, too.
“This has given us an increased focus on business case savings and making sure we are only executing those projects that provide positive, near-term results,” Mr. Peters says. And because there is company-wide transparency, the resistance to even difficult decisions has been reduced.
“While some people still may not like the decision, it’s hard for them to challenge the tough choices that need to be made because the PMO enforced and provided a process that everyone could live with,” he says.
PMOs may be just what organizations need as they are forced to make more and more of these tough calls.
