The project management office in a business strategy

Abstract

This paper presents some studies and considerations on the use of a project management office in a business strategy, identifies weak points regarding the understanding and sponsorship related to enterprise project management activities, and also addresses the most important functions a project management office can perform to empower a business strategy, while considering some business trends.

Introduction

Today, the use of a project management office in a business strategy is more important than ever before. Project Management Offices are evolving to really focus on value for the business as well as value for the entire corporate chain. Here, we talk about some key points and share some lessons learned by companies and professionals trying to improve their project management practices.

The project management office in a business strategy means achieving project management business value, mainly when applying project management in a global environment; in other words, “project management for everybody” as a business model—all levels, functional departments, cultures, and countries. The use of a project management office in a business strategy is about project management and the power of integration—from clusters to an effective network—which we will call from now on, the enterprise project management office.

Project Management Office Definitions and Executive Support to Project Management

To be able to achieve better results through the use of a project management office and the professional application of project management, a company and its executives must fully understand what it really means and how it can be applied to their strategy and business model.

The current misconceptions about the value of a project management office are partly due to the lack of knowledge and understanding that executives have about the field of project management, which we will now call, enterprise project management; in other words, the organizational development of a company and business through the application of project, program, and portfolio management best practices, as well the proper organization and distribution of resources. This was also confirmed through some research I did during my final years in Europe, while applying the Kerzner Project Management Maturity Model (Kerzner, 2001). The two questions are: What about the required executive support/sponsorship to the project management application? Do executives understand what project management is?

Results for the first question (Exhibit 1) indicate that an important percentage of business executives don't really understand what project management is or, at the very least, their team members cannot feel or see it. As a result, the respective support to the project management application and the respective development of project management offices can be negatively impacted; in fact, the results for question 2 (Exhibit 2) demonstrated that, on a day-to-day basis, team members are not able to see their executives supporting the application of project management, which is also demonstrated by the results for question 3 (Exhibit 3), where we can see that executives are not performing their role as project sponsors properly.

Executive Understanding of Project Management – Research in Europe (Ghisolfi, 2010)

Exhibit 1 – Executive Understanding of Project Management – Research in Europe (Ghisolfi, 2010)

Executive Project Management Support – Research in Europe (Ghisolfi, 2010)

Exhibit 2 – Executive Project Management Support – Research in Europe (Ghisolfi, 2010)

Project Sponsorship – Research in Europe (Ghisolfi, 2010)

Exhibit 3 – Project Sponsorship – Research in Europe (Ghisolfi, 2010)

These data, as well as the results of different market research studies, demonstrate that the understanding of project management (i.e. words, projects, multiple-projects, programs, portfolio, and project offices) are not well understood. The definition of the project management office is still not clear, which is also suggested by Dr. Brian Hobbs in his white paper, titled “The multi-project PMO: A global analysis of the current state of practice” (Hobbs, 2007). If we talk about project management offices, we can ask: Who are you? Are you a manager of a program office, project office, project support office, program management office, project assurance office, or a center of excellence office? In fact, we can easily identify different names for similar structures, but there is also a relative consensus on the definition of “project management office.” The lack of consensus about what a project management office is and what its functions and values are often creates obstacles when defining goals, positioning the project management office in the company, and also defining the required structure and sponsorship levels.

Even today, companies view project management offices in a very traditional way, most probably related to methodologies development and/or project monitoring but, in fact, even the name “project management office,” which is often related to project management office is not effective when sharing the goals, values, and activities that such a project management office will perform. Thus, simply using the name “project management office,” often creates confusion in people's minds. Another consideration is that, because there are different levels for project management offices, their respective functions will be directly related to the position (i.e. the level) the project management office holds in the organizational structure. These considerations contribute to creating confusion regarding the activities of a project management office. A good approach to underlining project management type and its respective values and functions, is to use a classification system, as defined by Rad & Levin (2002) and shown in Exhibit 4.

The Project Management Office (PMO) and Maturity Levels

Exhibit 4 – The Project Management Office (PMO) and Maturity Levels

For this paper, we will assume that the use of a project management office in a business strategy is related to project management offices performing activities at the Rad and Levin levels of 4 and 5 (5 is better). We will conclude with the position that where the project management office is located in the organization is crucial to defining its functions and respective values. “A wrong definition for the project management office position in the organizational structure or a wrong definition for the project management office's goals will directly impact the perception of the project management office's value for the organization.”

The Functions, Goals, and Value of the Enterprise Project Management Office in a Business Strategy

The functions, goals, and values of the project management office are directly related to its position in the company. For the reason of creating this paper, I have asked the project management office group on the LinkedIn Community Website to address, according to the project management community experience, what they think should be the functions of a project management office in a business strategy. So, the question was: In which way, can an enterprise project management office, working for the entire company, add value and be useful when implementing organizational strategies?

One hundred project management professionals participated in this survey, and the defined functions and results are as follows: (Exhibit 5)

Project Management Office Functions in a Business Strategy

Exhibit 5: Project Management Office Functions in a Business Strategy

According to the following survey, (Exhibit 6) we can see that the top functions for a project management office in a business strategy would be:

Main Project Management Office Functions in a Business Strategy

Exhibit 6: Main Project Management Office Functions in a Business Strategy

Performing the top eight functions is a sure way to add value to enterprise project management offices. We also need to consider that business trends can impact the way we use a project management office in a business strategy. This doesn't mean that the other identified functions are not important; they probably are and can be even more important in some special market segments. We must always remember that project management offices can possibly add value by adding those other functions to their on-going activities.

Considering some business trends, we could also call “;points of attention” or “;constraints,” an enterprise project management office, which can also add value to the business. Below, we briefly identify some business trends and highlight how a project management office can add value to a company.

Innovation: Can the project management office identify and sponsor innovation in projects and products? The answer is probably “yes”; and more so if the project management office team can really interface and understand the company's products and project teams; and even better if the project management office can understand the customer's needs and translate them into strategic projects.

Sustainability: Can the project management office develop special actions to assure sustainability alignment for projects? The answer is probably “yes.”

Perform better sales and business development: This is probably the number one reason for the professional application of project management because it is about trust between the customer and suppliers. The customer needs someone who is able to put all the pieces together and avoid wasting resources; this way, the project management office is the workforce that must assure proper integration, risk management, and visibility.

The integration: Customers are buying even more complete services, so it is not so much about products and machines, rather total services; so, again, the project management office is a workforce that must assure proper integration.

Globalization and virtual teams: Global companies will survive longer and be in better shape if they can be fast, which means implementing horizontal structures and faster decision-making processes. Global companies will survive if they can properly use their networks of customers and suppliers, and balance them with political and technical networks. The project management office would probably interface with all of those stakeholders.

Every day, leadership is becoming more important: The project management office must be a strong agent for change, by “developing leaders.”

Senior management needs to micro-manage less: The assumption could be: “Professionals know what they need to do.” Senior managers need to put more effort into integration actions, risk management, proper sponsorship in day-to-day activities, and the project management office needs to influence the organization to make this possible.

More focus on risk management: Business constraints are making risk management a hot issue, so the project management office can directly impact results and bring value by performing enterprise risk management.

Management maturity improvement: The project management office must put into place a strategy to increment the organizational maturity needed to achieve the required levels and, from time to time, measure and refine the process. This will probably involve the entire company and require integrated efforts from different teams.

Conclusions

In the future, the use of project management offices in the business strategy will become more important, but as they relate to their respective functions, “the borders,” are still not so clear to many companies and executives.

To develop consistency in global environments, project management offices will become even more important. Thus, the development and application of global policies will become the framework to assuring global alignment and must be used by local teams to develop detailed strategies, under the guidance of an enterprise project management office.

We must expect project management offices to build stronger working relationships with strategic management, human resources, IT, finance and accounting, and communications departments, in addition to others.

Project management team members: Most project management offices have very small staffs; hence, in a global business environment we need to ensure that we have enough professionals with the following desired skills to perform work in these global environments: knowledge of multiple languages, good communication skills, accuracy when sharing and delegating activities, ability to work in virtual teams and environments, a systems approach and view about business, processes, and social relationships.

Education: Must be able to think globally. The assumption today is: “Project managers know the job they need to do,” but what about the rest of the company? We need to develop the entire company; we must teach everybody how to think and work, using a professional project management approach. To make all this happen, executives must learn how to apply project management to the business, learn how to design a project management office, and learn how to perform the required sponsorship actions, which will probably not work with executives and companies who lack the appropriate knowledge, experience, and leadership.

Better value recognition and new opportunities must arrive for enterprise project management offices, companies, and executives who understand how to apply the enterprise project management approach. Education and knowledge are the foundation for improvements in corporate maturity.

References

Ghisolfi, A. S. (2010).– Enterprise Project Management Maturity in Europe. Universidad Rey Juan Carlos: Spain. Unpublished Doctoral Thesis Research

Hobbs, B. (2007). White paper: The multi-project PMO: A global analysis of the current state of practice. Retrieved from http://www.pmi.org/PDF/PMO%20Whitepaper_FINAL_launch%20copy.pdf

Kerzner, H. (2001). Strategic planning for project management using a project management maturity model. Hoboken, NJ: John Wiley & Sons, Inc.

Parviz, F. R., & Levin, G. (2002). Advanced project management office, Boca Raton, FL : CRC Press.

This material has been reproduced with the permission of the copyright owner. Unauthorized reproduction of this material is strictly prohibited. For permission to reproduce this material, please contact PMI or any listed author.

© 2010, Alexandre Sörensen Ghisolfi
Originally published as a part of 2010 PMI Global Congress Proceedings – Washington, DC

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