Is your PMO what it should be? a model to define which functions a PMO should perform, taking into consideration the expected benefits of its clients
In a worldwide scenario where PMOs are being continually challenged to deliver value to their organizations, how to ensure that a PMO is fully aligned to the needs of its clients?
Based on a research conducted with PMO leaders and PMO clients in Latin America, this paper presents an original model developed to suggest and prioritize the functions that a PMO could perform, considering the expected benefits by its clients.
This model, named PMO MIX MANAGER, is freely available at www.pmotools.org for all project management worldwide community.
Since the ‘90s it has been possible to observe the emergence of consistent Project Management Offices (PMOs) in organizations around the world. This trend has been confirmed and consolidated over the last decade (Dai & Wells, 2004, p. 524; Hobbs & Aubry, 2007, p. 74), reinforcing the perception that many of the largest organizations in several countries have at least one PMO in their structure.
The creation of these PMOs has been justified over the years by different needs, but most of them have always shared a larger common goal: to obtain better results in the projects developed by the organization.
The existence and continuity of these organizational entities, on the other hand, has been constantly questioned in many organizations, as identified by Hurt and Thomas (2009, p. 55) when reporting “the tenuous issue of sustainability of PMOs.”
The ultimate goal of PMOs worldwide is to generate perceived value to their organizations and therefore are permanently challenged, which in many cases results in loss of support, reductions, and even the complete elimination of the area.
This significant variation in the perceived value of PMOs was confirmed by Hobbs and Aubry (2007, p. 74) and deepened by Aubry, Hobbs, and Thuillier (2008a, p. 43), via analyzing the story of four PMOs and realizing a complex phenomenon: the transformations of these entities, on average every two years, due to the process of evolution or an organizational instability.
In another qualitative study, Aubry, Hobbs, and Thuillier (2008b, p. 554) also concluded that organizational tensions are the main motivations behind the reconfiguration of PMOs, which thus justifies the need for flexible models that enable new or existing PMOs to adapt to changing needs, an objective of this article.
Additionally, in their study “A Portrait of Reliable Population of PMOs,” Hobbs and Aubry (2007, p. 82) reported that among 500 PMOs evaluated worldwide, 50% provide the function of “monitoring and controlling the performance of the PMO,” demonstrating the concern and the need for PMOs to measure their own performance, and reinforcing the need to establish models – such as the one presented below – to facilitate this process.
A PMO can be seen as a service provider, which has clients with specific needs (Pinto, Cota, & Levin, 2010a, p. 386). Senior management, project managers, functional managers, and team members are some of those potential clients who have different needs, and in some cases even conflicting needs.
The better a PMO delivers its services (or functions), and only those related to the needs of its clients – such as identified by Thomas and Mullaly (2008, p. 33) by introducing the concept of “fit” – the greater the perceived value generated.
But the one important question for a PMO leader is: Is your PMO what you idealized by yourself or it is what your clients really need?
Definitely it is common to find PMOs performing services that do not meet the value expectations of their clients. Some PMOs apparently have little commitment to the practical application and effective results. And the result is that they lose support quickly because they do not generate perceived value for their clients and for the organization.
But how to know what clients really need from the PMO? Asking them directly might seem like a good alternative, but the problem is that the language of the leader and members of the PMO is not the same as their clients. While the PMO thinks “what services we should offer,” the client thinks “what benefits and results are concern to me and the organization.” The solution then is to speak the same language of the clients: benefits and results.
Considering the gap in existing knowledge on the subject, this paper proposes a new model to help a PMO to establish what services should be prioritized, while considering the expected benefits of its clients.
One of the findings of the first study that presents a “Reliable Portrait of the Population of PMOs” (Hobbs & Aubry, 2007, p. 82) was that 50% of the PMOs investigated have the function of monitoring and controlling their own performance. In other words, PMOs are concerned with assessing and measuring their own performance. And considering the lack of knowledge that exists regarding the maturity of PMOs, this paper suggests a specific model to assess the PMO maturity. Its aim is to allow a PMO, based on its mission, to objectively assess its maturity level, considering the degree of sophistication with which it performs each of its functions, while also taking into consideration its clients interests and the organization's needs.
Identifying the Potential and Expected Benefits
The literature presents several definitions for the term “PMO,” but many share the same essence: The PMO is an area that centralizes certain activities – also called functions or services – related to the practice of project management, with the goal of making the organization achieve better results through projects.
Some common functions/services of PMOs are: reporting project/program status to upper management, developing and implementing a standard project management methodology, providing mentoring for project managers, managing one or more portfolios, and even, manage certain projects or programs considered strategic. These and other functions/services were observed by Hobbs and Aubry (2010, p. 40), totaling 27 functions/services most commonly found in 500 PMOs worldwide.
A PMO that wants to survive in an organization needs to understand itself as truly a services provider, remaining permanently aligned to the needs of its clients. On the other hand, it is important to draw attention to the complexity of maintaining this alignment, as the organization and the clients of the PMO are also constantly changing, depending on the business scenario, strategic decisions or simply by the maturity evolution of each its clients, which directly influence their needs.
In other words, the success of a PMO goes not only for its ability to understand who its clients are, but also their needs and how to meet them while creating clear benefits and perceived value. In fact, it also involves its continuing ability to readjust and reconfigure, as well as understanding and meeting the new needs arising from the maturing of its clients and the organization as a whole.
Among other aspects, this challenge involves mainly the ability of the PMO to provide services aligned to the priority needs of its clients. But how do you translate those needs into a set of services provided by the PMO?
In general, PMO clients expose their needs in terms of expected benefits, not in terms of what services should be provided by the PMO. For example, a senior director may possibly say that it is among his or her priorities to have more effective control over projects, but hardly identify the best way to do this. Would it be providing a methodology for project management? Mentoring for project managers? Planning support? Finally, what services offered by the PMO can maximize the possibility of generating the expected benefit for the client, in this case, more effective control?
In order to study this issue, the first step of this research was to understand that these expected benefits may extend into an extensive list, which for purposes of this study, was developed and validated in interviews (Silverman, 1997) with PMO clients in different hierarchical levels among 11 organizations from 9 industries (Banking, Consulting, Energy , Financial Services, Manufacturing, Mining, Oil & Gas, Retail, Service, Telecommunications), located in Latin America, totaling 45 respondents (12 directors, 12 project managers, 11 functional managers, and 10 team members).
Thus, 30 potential expected benefits were identified and listed in the following table:
Defining the Mix of Services
But how to know what benefits each service could generate? To answer this question in a quantitative approach (Cooper & Schindler, 2008), we used a questionnaire relating PMO services and expected benefits, which was answered by 40 highly experienced leaders of PMOs in organizations in advanced stages of maturity located in Latin America.
Basically, each respondent identified his or her perception of the probability of obtaining each benefit from the implementation of a particular service of the PMO, based on his or her own experience. The PMO leaders may agree, for example, that a particular service would be able to generate a specific benefit while another service rarely contributes to generating this same benefit.
Thus, it was possible to establish correlations between services offered by the PMO and the perception of benefits, which could be more or less likely to be observed.
Based on consolidation of reasoned opinions and the observed correlations, we identified the services that could maximize the probability of obtaining a particular benefit.
The result of this research phase established thus probability curves suggesting the weight of the contribution of each service in the generation of a specific benefit.
As such, it was possible to build a database with probability curves based on experience from experienced PMOs leaders for each of the 30 potential benefits identified.
Exhibit 3 shows the curve for the benefit of “Greater availability of resources with skills in project management.” It can be seen in this case that from the 27 services, only five were cited as relevant to generate such benefit, and each one contributing in a different intensity for the cumulative probability of achieving the expected benefit. The first services of the curve have higher contribution and, of course, are a priority to maximize the probability of obtaining the desired benefit.
But how can all this information be used to align the PMO with the needs of each client? Firstly, to answer this question it is necessary to obtain from the PMO client what his or her priorities are in terms of benefits, using the list of 30 potential benefits presented earlier. Then, using the probability curves for each benefit prioritized by the client, it is possible to establish a kind of “mix” of services – in fact, a new consolidated curve – that best serves the needs of that client. Again, the first services on the curve are those that have a greater degree of contribution, and therefore, should be prioritized.
Following it is possible to see, for instance, the curve suggested to the client “Project Manager X,” which was based on the five prioritized benefits identified via a questionnaire with thirty potential benefits. In this example, the services “Develop and implement a standard project management methodology,” “Monitor project/program performance,” and “Implement and operate information systems projects” are the main contributors in generating the expected benefits. On the other hand, the contribution of the service “Monitor and Control the performance of the PMO itself,” at the end of the curve, is the one with the least potential to contribute to the expected benefits.
Naturally, a PMO should have more than one client, even in different hierarchical levels. In this case, it is possible to establish specific curves for each client and consolidate them in “clients’ group curves” as directors, project managers, teams, among others. In this case, each group will have its own curve, consolidating their own suggested “mix” of services.
Finally, using the same reasoning, it is possible to establish the curve consolidated for the PMO, with a suggestion of prioritization for the “mix” of services that the PMO could offer, taking into account the expected benefits for each of its clients.
It is also possible to establish different weights for each group of clients, which would influence the construction of the consolidated services curve for the PMO.
Thus, the suggested “mix” of services for the PMO is the consolidation of the resultant clients curves in client groups curves, and subsequently in a single curve to the PMO, taking into consideration the respective weight of each client group, if necessary.
In the example below, the final curve for the PMO focuses on three priority services: “implement and operate project management information systems,” “develop and implement a standard project management methodology,” and “coordinate and integrate the projects in the portfolio.” The service “audit projects and programs,” potentially, is the least helpful in meeting PMO clients’ needs.
It is important to reinforce that this model is not intended in any way to be deterministic or establish final cause and effect relationships between services and benefits. It is just a tool to encourage reflection about the alignment between the PMO and the real needs of their clients and the organization, using the experience of PMO leaders that have gone through similar situations as a reference.
Eventually, services that are not part of the 27 identified by Hobbs and Aubry can and should be considered if they meet the specific needs of some client. Additionally, services that are positioned in the middle of the curve are also subject to further assessment of its importance. On the other hand, services located at the beginning of the curve must be considered, while those that enclose the curve should, of course, be questioned.
Finally it is recommend that those interested in evaluating the maturity of a PMO under the same philosophy of a “service provider PMO,” access a model designed for this purpose at www.pmomaturitycube.org (Pinto, Cota, & Levin, 2010b), which has been used since 2010 by more than 400 organizations in 17 different countries.
To consistently create value for an organization, a PMO should establish its services based on the combined needs of its clients and the expected benefits and results. It should also prioritize and develop services that most contribute in meeting the expectations of its clients. And finally, it should continually reevaluate the “mix” of services established, and keep in mind that the needs and expectations of its clients can and will change.
It is a fact that “surviving” is today one of the great challenges of many PMOs, which have been systematically challenged regarding their value and contribution to the organization.
Understanding that the PMO is a service provider and serving its clients is the top priority is the first step towards a successful PMO. The second step, no less important, is to understand that the change process is permanent and the PMO that fails to meet it is on the path to failure.
Change and re-adaptation is not the main problem. The major flaw is not realizing the need for change or not having a clue as to where to get it, contributions that the model presented in this article hopes to give.
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© 2013, Americo Pinto
Originally published as a part of 2013 PMI Global Congress Proceedings – New Orleans, Louisiana