Identifying forces driving PMO changes

 

Brian Hobbs, MBA, PMP, University of Quebec at Montreal, Canada

Ralf Müller, DBA, PMP, Umeå School of Business, Umeå University, Umeå, Sweden; Norwegian School of Management BI

Tomas Blomquist, PhD, Umeå School of Business, Umeå University, Umeå, Sweden

Abstract

PMOs are dynamic organizational entities, frequently in transition from one charter and structure to the next. Within this paper, we present empirical results on the nature and reasons for this transition. The paper reports the second of a series of studies aimed for understanding the dynamics of PMOs. It addresses the mistaken paradigm that PMOs change because characteristics or functions in an existing PMO are wrong and require a new PMO charter or structure that can last for a long time. Instead of that, the paper proposes a process view on the transformation of the PMO as being triggered by conditions within the external and/or internal context and producing outcomes in terms of impacts from the transformation. A global web-based questionnaire on PMO transitions in structure and charter yielded 184 responses. Factor analysis and correlation analyses revealed that the transition of a PMO from one configuration to the next is not a question of being right or wrong. PMOs in transition can rather be understood as a multi-level dynamic process anchored in a specific organizational context-change. From the academic viewpoint, the authors believe that this research filled a large gap in the understanding of the reasons for and nature of PMOs to transition.

Keywords: project management office, PMO, transformation process, drivers of change, organizational change

Introduction

The project management office (PMO) is currently gaining momentum as a research topic. A multitude of studies confirms the significance of this organizational entity and its structure for the management of issues in multi-project organizations. These issues are addressed through a diversity of PMO implementations and charters (Aubry, Müller, Hobbs, & Blomquist, In press; Dai & Wells, 2004; Hobbs & Aubry, 2007; Hurt & Thomas, 2009; Pellegrinelli & Garagna, 2009). Despite the dynamic context within which PMOs try to solve organizational issues, a mistaken paradigm exists that changes in PMOs, or even their termination, are due to wrong configurations of PMOs, which need to be corrected through transition into new and good PMOs that will last much longer than their former versions (Hatfield, 2008). However, this long-term effect rarely takes place. Empirical evidence shows that PMO life expectancy is approximately two years (Hobbs & Aubry, 2007; Interthink Consulting, 2002; Stanleigh, 2005). PMOs are dynamic entities created to solve specific issues within dynamic organizations. That implies a short life-expectancy for PMOs.

Addressing multi-project issues by means of organizational structure and measures has been researched extensively in terms of program, portfolio, or multi-project management. Focus in the literature has mainly been on processes (e.g. Cooper, Scott, & Kleinschmidt, 1997a, 1997b; Engwall & Jerbrant, 2003), categorization (e.g. Crawford, Hobbs, & Turner, 2005), control (Müller, Martinsuo & Blomquist, 2008), context (Blomquist & Müller, 2006; Pellegrinelli, Partington, Hemingway, Mohdzain, & Shah, 2007), as well as organization structure (e.g. Gareis, 2004; Hobbs & Ménard, 1993; Hobday, 2000; Larson, 2004).

However, structural transformation of PMOs has rarely been addressed within the project management literature. Structuring refers here to the dynamic process of defining and implementing organizational structures that are undertaken to maintain alignment with the strategy. Pettigrew (2003) refers to this double-sided reality as strategizing–structuring to describe this dynamic process in the context of innovative forms of organization. Within this, perspective changes in the structure of the PMO have some kind of relation with changes in the strategy and the internal or external context of the organization. Current project portfolio management includes the dynamic alignment between strategy and projects without addressing impacts on the PMO structure (e.g., Kendall & Rollins, 2003; Müller, 2009). This alignment through PMOs created a variety of PMO structures and charters. However, the process underlying the PMO transition is still unknown. The research question in this paper is therefore: What are the drivers, implications, and results of PMOs in transition?

The unit of analysis in the present research is the transformation process of PMOs. The aim of the study is to identify the triggers that lead to a transition, the nature of the transitions that PMOs go through, and the outcomes obtained from them. A sequential mixed-method approach is used to develop a robust theory (Brown & Eisenhardt, 1997). The present paper builds on prior work by the authors, which was published elsewhere (Aubry, Hobbs & Thuillier, 2007; Hobbs & Aubry, 2007). Results from qualitative case studies (i.e., the first of the two studies in this multi-method approach) provided the hypotheses which are tested in the present quantitative phase. These results contribute to the theoretical foundations on PMO transitions and more generally to organizational project management theory. The results also provide guidance for project management practitioners and their management in the implementation and management of PMOs. They should also contribute to a shift from the mistaken negative paradigm of PMO fault, to a dynamic paradigm of PMO change.

The next section presents the conceptual framework of the study. The following section presents the methodology. Subsequently the analysis results are presented, and then discussed, and the paper finishes with conclusions and suggestions for further research.

Review of the Literature and Research Framework

“The organization that never changes eventually loses synchronization with its environment, while the one that never stabilizes can produce no product or service efficiently” (Mintzberg & Westley, 1992, p. 46). PMO is not a difficult entity to capture in a snapshot. What is difficult is to make sense of the rapid pace of its transformation. But as Mintzberg and Westley (1992) suggested in the previous quotation, organizational change is a necessary feature for every organization. The PMO is not an exception to this rule. In this context, we review the literature on organizational dynamics and the PMO. Then we propose a conceptual framework that will help making sense of the PMO's transformation process.

Organizational Dynamics

The aim of this research is to understand why and how PMOs are changing. This calls for a process view where the unit of analysis is the PMO transformation. Organizational changes have been studied over decades. As an historian of organizations, Chandler (1962) was one of the first who looked into the relationship between change in the external environment, the organizational strategy, and the resulting structure, considering organizations from the turn of the 20th century onwards. Today, organizations have developed in multiple dimensions. It is often hard to get the full organizational chart on a single page (Galbraith, 2002). Structures are more hybrid: distributed, dependent on networks of other organizations (Powell, 1990), N-Form (Hedlund, 1994), molecular (Morabito, Sack, & Bhate, 1999), cellular (Miles, Snow, Mathews, Miles, & Coleman, 1997), arranged in strategic allegiance (Eisenhardt & Schoonhoven, 1996), customer centric (Galbraith, 2002), and changed while technologies are changing (Ciborra, 1996). But these new forms of organizing build upon existing hierarchies. There is continuity in traditional hierarchical forms of organizing. New characteristics just add to the existing hierarchy (Ruigrok, Pettigrew, Peck, & Whittington, 1999).

Within this structural context, dynamics through organizational change seem to be the norm rather than the exception. It is not the intent of this paper to present a comprehensive review of the literature on organizational dynamics, but rather to propose an overview of different and complementary perspectives that should help in answering the research question.

One perspective to understand organizational dynamics is to turn towards the drivers that lead to organizational change. Studies undertaken on drivers of change point towards different elements: increase in the complexity from external factors and internal structures (Ciborra, 1996); new technology (Anderson & Tushman, 1990); the shift in business logic, particularly from tangible products to intangible, where relationships have greater importance (Vargo & Lusch, 2004); increase in the complexity of solutions sold that are a compound of a product and service that creates value and enhances the capabilities of the buyer (Brady, Davies, & Gann, 2005). A complementary view on the reason for a change is to take the internal organizational context into consideration. Pettigrew and Whipp (1991) argue that to understand changes, we need to view them as dependent on process, context, and contents of change.

A second perspective to understand the organizational dynamics is given by the patterns of change in organizational change. These have been discussed over a longer time by scholars and we do not have any expectations to describe and to give justice to the entire field of research done in organizational behavior, strategic management, and sociology. Among the important works are the ideas by Lewin (1958) on the organizational process of change as three stages of unfreeze, change, and refreeze. Important works (Greenwood & Hinings, 1996; Hannan & Freeman, 1984; March, 1991; Van de Ven & Poole, 1995, 2005; Weick & Quinn, 1999) share a common view that changes in organizations go from periods of revolution to longer periods of evolution. Organizational change is often describes as the amplitude of the change—revolutionary or evolutionary. The former could be described as a punctuated equilibrium where changes are fast and intense (Romanelli & Tushman, 1994; Tushman & Romanelli, 1985). The latter could be better described as a continuous change process (Pettigrew, 1985). A number of studies of these types of changes have been done be Miller and Friesen (1984). These were followed by Greenwood and Hinings (1988) by studying organizational archetypes or structures that, over time, create patterns of change. However, changes in patterns, routines, and structures could suffer from inertia and may not always establish a full transformation (Laughlin, 1991).

A third perspective is offered by Van de Ven and Poole (1995, 2005) who worked on different theoretical approaches to organizational change seen as a process. From their research in 1995, they proposed a typology of four different approaches for studying organizational change based upon two axes: unit of change (single entity or multiple entities) and mode of change (prescribed or constructive). Considering the present research, the mode of PMO change is more likely to be constructive rather than prescribed. PMO is looked at as a single entity, but at the same time as a part of the wider organization, with which it constantly interacts. Seen as a single entity, the PMOs would fall within the teleology type of approach characterized by a purposeful enactment, social construction, and consensus. However, when looked at as multiple entities, the PMO falls under a dialectic type of approach characterized by pluralism (diversity), confrontation, and conflict. It appears that theoretical approaches to the study of PMO transition could reside on two grounds—one of social constructivism and the other on conflict.

A fourth perspective on organizational change is offered within the strategy literature. Rajagopala and Spreitzer (1997) provide a comprehensive review of the literature on strategic change. They identified four models, each one referring to a specific perspective towards the change process: rational lens, learning lens, cognitive lens, and finally a multi-lens framework. In the rational lens perspective, the process is initiated by changes in the environmental conditions. Then, the strategy is changed. Finally, organizational outcomes are produced. There are feedback loops within this process. In the learning lens perspective, managerial actions are added within the model bringing in the human dimension related to an organizational change. Feedback loops added up to the new components. Within the cognitive lens perspective, managerial cognitions are added in order to capture the sense-making of conditions and changes that happen in the environment and or within the organization. Feedback loops are also added here. Finally, the multi-lens framework integrates the previous three perspectives offering a more complex network of interactions at the same time as being able to capture the complexity of organizational changes.

Project Management Office

Despite the vast amount of practitioner literature on PMOs, relatively little research is available on PMOs and their adaptation to changing organizational or other circumstances. Research studies on PMOs often address the variety in charters, structures, and authorities (e.g., Dai & Wells, 2004; Duggal & Turner, 2007; Kerzner, 2003; PMO Executive Council 2005, 2006a, 2006b; Rad, 2001; Rad & Levin, 2007). Hobbs and Aubry (2007) were among the first to go beyond the mere description of PMO functions and roles by looking at the life-time aspects of PMOs and linking that to the variety of charters and structures of PMOs. This research identified an underlying dynamic and a need for PMOs to transition between different combinations of charters, structures, and authorities. The conceptual framework is shown in Error! Reference source not found.. It is process-based and aims at capturing the PMO transformation as it unfolds. The process is initiated by conditions within the external organizational context and/or internal context that act as drivers for PMO changes. These conditions put pressures on the current PMO structure, causing a transformation of the existing PMO model. The resulting PMO is a new PMO model. This research, which was based on a small sample, captured the existence of multiple cycles in a continuous dynamic context, but did not investigate them thoroughly.

Research framework

Figure 1: Research framework.

Methodology

The study adopts a realism epistemological perspective, which assumes an objective reality that can only be subjectively interpreted by human beings. To that end we assume a subjective understanding of reality, where theories are needed to allow us to understand the objective underlying mechanisms that make up the phenomenon under study. A web-based questionnaire was used in this exploratory study to collect mainly quantitative data on the concepts shown in Figure 1. PMO structure before and after the PMO transformation, refers to almost the same set of questions, which describe the structural characteristics (13 questions) and functions (2 questions) at two different points in time, that is, ex-ante and ex-post the transition of the PMO. Similar 9-point scales were used, except in cases where numbers or percentages were required. The construct for PMO transformation used similar scales to assess time and magnitude of the transformation and the change process (4 questions). The outcome construct mirrors the issues that were proposed as internal drivers for change. It answers the question of whether the PMO transformation has impact on the original issue that led to the change. The questionnaire was developed using a grounded theory approach, done through interviews with PMO managers and members in Sweden and Canada. A pilot test in French and English resulted in very few modifications for the final version.

A snowball approach and convenience sample was collected by addressing professionals, professional organizations, and researchers in project management and PMO. The link to the survey was posted on the PMI website as well. While this approach does not allow for the calculation of a traditional response rate, it does ensure quality in the answers, as only members of professional organizations or personal networks with known levels of expertise were targeted. Through this approach, the researchers were able to ensure that respondents were experienced practitioners. The survey was accessible from September 2008 up until March 2009. Three reminders were sent during that time. The number of valid responses was 184.

Prior to the application of analysis techniques, the data were tested for compliance with the underlying assumption of the multivariate analysis techniques used. The analysis was done using two types of analyses:

  • 1. Factor analysis, to identify the underlying structures and minimize the number of constructs for context, changes initiated, and impact accomplished. This provides for parsimony of the model. Four groups of factors were identified to summarize the answers to the questions on:
  • Contextual conditions that drive or trigger a change of PMOs;
  • Issues related that drive or trigger a change of PMOs;
  • The nature of the changes to the PMOs; and
  • The impact that the transition had on the PMO and the organization.
  • 2.Pearson correlation analysis, to identify the correlation among the factors of the four groups mentioned above and to identify the correlation between triggers, action and results in the PMO transition.

Reliability of the factor data was tested using Cronbach's Alpha. Factors with alpha values greater than 0.6 were considered reliable (Cronbach, 1959). Factor loadings greater than 0.5 were considered significant (Hair, Anderson, Tatham, & Black, 1998). Those factors not meeting these two threshold levels were considered orphans and listed in the respective tables, but excluded from further analyses. Detailed results from factor and correlation analyses are presented in specific sections in this paper.

Descriptive Analysis Results

Responses on PMO demographics, that is internal characteristics of organizations such as size, maturity level in project management, etc., showed similarity with earlier studies (e.g., from Hobbs and Aubry (2007). This stability contrasts with the dynamics of PMOs.

Results confirm that changes to PMOs are important in their magnitude, but their implementation is quite difficult. Difficulty in implementation is amplified by the fact that 40% of PMO transformations did not have a change management process to which another 10% could be added from respondents who didn't know if they had one bring the total to 50%.

Moreover, multiple factors and issues play a role in PMO transition, with no single factor or issue being prominent. This reinforces the assumption that multiple, not single, reasons lead to PMO transition. A particular PMO situation can therefore only be examined as an interwoven combination of multiple contextual aspects that are interpreted in the context of, for example, reactive PMOs to correct problems, or learning–based approaches for PMOs to build skills (Lundin & Midler, 1998; Senge, 1994).

The importance of a PMO after PMO transition is reported to be greater than before the transition. However, access to upper management was reduced through the transition.

Results from Factor Analysis

This section presents the results from the four factor analyses: contextual conditions, issues related to the PMO change, the nature of the change to the PMO, and impacts after the change.

Contextual Conditions Related to a PMO Change

Conditions leading to a PMO change come from internal and external events and issues. Individual factor analysis was done for events and for issues (see Error! Reference source not found.). The factor analysis identified four factors from which two can be considered as reliable and will be looked at in more detail. The first factor contains all five of the external contextual factors and has been given the label external factors. The interpretation of this factor is quite straightforward, as it refers to changes in the external environment of the organization. It is interesting that all of these changes are statistically significant. They all represent pressure being put on the organization to adapt to a demanding situation.

Table 1: Factor analysis of external and internal conditions driving changes to PMOs.

Survey Items Factor 1 Factor 2 Factor 3 Factor 4
External Factors Change in Top Management NA NA
Change in global or local economy 0.827 0.005 -0.063 0.180
Change in your industry or market 0.734 0.037 0.011 0.281
Change in the national or local political environment 0.607 0.331 0.185 -0.088
Change in the regulatory environment 0.646 0.194 0.406 -0.110
Pressures related to social responsibilities, ethics, or environmental impact 0.689 0.094 0.258 -0.040
New ownership through merger or acquisition 0.325 0.528 0.077 0.152
New CEO 0.069 0.866 0.075 -0.102
Changes in the composition of the executive team other than the CEO 0.021 0.765 0.057 0.215
Broad organizational restructuring 0.157 0.556 -0.065 0.428
Unsatisfactory project performance or failures 0.210 0.006 0.557 0.202
Competition with other parts of the organization either for mandates or for resources -0.001 0.160 0.759 0.004
Changes in the total project workload, i.e., number, size or complexity of projects 0.152 -0.040 0.743 0.139
New PMO manager 0.072 0.011 0.166 0.745
New vision and/or strategy of the executive team 0.038 0.312 0.141 0.650
 
% Variance 19.24 15.75 12.67 10.24
% Cumulative variance 19.24 34.99 47.66 57.90
Cronbach's alpha 0.787 0.712 0.552 0.386

Note—Factor loadings > 0.50 appear in boldface type.

The second factor has been labeled Change in top management. It is noteworthy that neither the appointment of a new PMO manager nor changes to the vision and/or strategy of the executive team, forming factor four, are associated with this factor. Because of low values for the Cronbach Alphas, they are regarded as orphan variables along with the three variables in the third factor.

Issues Related to a PMO Change

Four reliable factors were identified among the issues related to PMO changes, as shown in Error! Reference source not found.. The first factor labeled portfolio management and methods contains four variables commonly related to multi-project management in general and to project portfolio management in particular. These four variables form a conceptually homogeneous group. The factor also contains the variable related to fit between project management methods and project characteristics. The loading of this last variable is smaller than the others. However, there is an element of consistency. Portfolio management is associated with grouping projects by type. One of the uses of such typologies is to customize methods to the needs of each project type or fitting the method to the project characteristics. Finally, the factor includes the variable on standardization of project management methods. Even if this element is rarely mentioned as part of project portfolio management standards, standardization is prerequisite to any aggregation of projects at the portfolio level. Yet, it might not be surprising that issues related to standardization are perceived by respondents as being associated to portfolio management. Müller, Martinsuo and Blomquist (2008) showed that the use of standardized reporting methods and metrics are a prerequisite for portfolio performance. This link between disciplined behavior across all projects in a portfolio and the portfolio's performance is reflected in the combination of variables that load on this factor.

The second factor is labeled collaboration and accountability. It contains four variables related to collaboration among project stakeholders. This factor summarizes the human relationship dimension of the PMO work. All of the variables loading on this factor relate to agency theory (Jensen, 2000). This theory addresses the problem of human interaction in the context of information and power imbalance. Central aspects of this theory are the two problems related to delegation of work:

  1. Was the work delegated to the right person? Does he or she have the skills and other requirements to succeed?
  2. Will the person chosen for delegation act in the best interest of those who delegated the work?

The human relationship dimension also evokes the political dimension. Both this statistical data and the qualitative data from the case studies indicate that organizational politics plays a significant role in driving and orienting PMO transformations.

Table 2 Factor analysis of issues related to PMO change.

Survey Items Factor 1 Factor 2 Factor 3 Factor 4
Portfolio Management and Methods Collaboration and Accountability Project Management Maturity and Performance Work Climate
Project alignment with strategy 0.678 0.164 0.270 -0.139
Availability of relevant information to decision makers 0.689 0.371 0.171 0.131
Project selection 0.740 0.113 0.034 -0.045
Allocation of resources across multiple projects 0.795 0.173 -0.114 0.177
Fit between project management methods and project characteristics 0.522 -0.001 0.235 0.450
Standardization of project management methods 0.661 -0.038 0.452 0.218
Customer and stakeholder relations 0.097 0.730 0.078 0.091
Project management and line collaboration 0.113 0.734 0.073 0.160
Tensions or conflicts within the organization 0.096 0.511 -0.081 0.207
Accountability for projects 0.176 0.707 0.270 -0.017
Synergy among project managers 0.161 0.594 0.371 0.227
Organizational commitment to project management 0.029 0.299 0.631 -0.003
Project management skill level 0.086 0.183 0.709 0.381
Project performance 0.392 0.434 0.539 0.042
Project management maturity 0.487 0.107 0.582 0.099
Work climate 0.024 0.121 0.234 0.714
Work–family equilibrium 0.112 0.259 0.044 0.816
 
% Variance 18.53 15.56 12.24 10.01
% Cumulative variance 18.53 34.09 46.33 56.34
Cronbach's alpha 0.833 0.721 0.754 0.677

Note—Factor loadings >0.50 appear in boldface type.

Agency problems occur whenever responsibility is delegated, for example at every node of an organizational hierarchy or network, as well as the interface between organizations, projects, and its stakeholders. Crawford, Cooke-Davies, Hobbs, Labuschangne, Remington, and Chen (2008) showed that being accountable for projects requires collaboration with a variety of key stakeholders. This research on project sponsorship gives an example of strong links between the sponsor, the project and the permanent organization, including the PMO. The third factor, labeled project management maturity and performance, contains the variables organizational commitment to project management, project management skill level, project performance, and project management maturity. These form a consistent group of issues. The strongest weighting is on project management skill level. The association with maturity is intuitive. That organizational commitment to project management is associated with both is also intuitive, as both of these variables would be more of an issue in organizations where commitment to project management is also an issue. It is conceptually consistent that, in situations where the other three variables are issues, project performance would also be an issue. These four variables, therefore, form a consistent set of issues.

The fourth factor, labeled work climate, contains two variables that are conceptually consistent and readily interpreted.

Only two variables were left as orphans, business performance and cost of PMO, both of which are unrelated to the other issues. It is particularly interesting that business performance is unrelated to any other issue. This begs the question: what is related to business performance?

The Relative Importance of the Drivers of Change to PMOs

The internal and external events and the issues all provide explanations of the forces driving the changes to the PMO. Figure 2 shows the drivers in decreasing order of importance. There are significant differences in the average importance of all of the drivers except the issues of portfolio management and methods and of collaboration and accountability, which are of almost identical importance. The differences in average importance among all the other drivers are significant at levels from p < 0.000 to p < 0.05.

Relative importance of drivers of PMO change

Figure 2. Relative importance of drivers of PMO change.

This result provides the best explanation of why organizations change their PMOs. The relative importance of the drivers of PMO transformations also provides some insight into how organizations evaluate the performance of their PMOs. Issues related to project management maturity and to project management performance are the strongest drivers of changes to PMOs. Organizations see the PMO as a lever for improving project management practice and performance and change the PMO when these are issues. The fact that this is the most important driver indicates that the ability to improve project management practice and performance is an important measure of PMO performance as suggested by Kendall & Rollins (2003).

The importance of portfolio management highlights what has become a very important organizational issue in recent years. The relational or political issues are of equal importance. Changes to top management and broad organization-wide structural change are also important drivers of changes to PMO. Organizations today are in a constant state of flux and PMO transformations can be seen as being an integral part of this flux. External conditions are seen as the least important driver of changes to PMOs. However, evidence from the qualitative case studies indicates that more senior people link PMO transformation to external economic conditions more often than less senior people. There is a link but people in middle management see the changes as being driven much more by the internal dynamics of the organization.

The Nature of the Changes to the PMOs

The analysis identified three reliable change or DELTA factors (see Error! Reference source not found.). The first labeled PMO functions and supportiveness contains all of the nine PMO functions identified in this study and the supportiveness of the PMO. Increases in the importance of all nine functions and increased supportiveness form a consistent factor related to the support provided by the PMO.

The second factor, labeled scope of control mandate, contains increases in the controlling nature of the PMO, variables related to the scope of its mandate in terms of percentages of projects and project managers, and higher hierarchical reporting level. Together they form a consistent image of increasing control and scope of mandate. Reporting higher up in the hierarchy is consistent with a wider mandate focused more on control.

Table 3 Factor analysis of changes to PMOs

  Factor 1 Factor 2 Factor 3
Survey Items PMO Functions and Supportiveness Scope of Control Mandate PMO Autonomy
Monitor and control project performance, including the development of Projects Information System and the reporting function 0.647 0.349 0.380
Develop and implement standard methodologies, processes and tools 0.790 0.138 0.214
Develop the competency of project personnel including training and mentoring 0.805 0.005 0.230
Multi-project management including program and portfolio management, coordination and allocation of resources between projects 0.846 0.105 0.187
Strategic management including participation in strategic planning and benefits management 0.697 -0.044 0.384
Organizational learning including the management of lessons learned, audits and monitoring of PMO performance 0.805 0.062 0.348
Management of customer interfaces 0.718 0.156 0.157
Recruit, select, evaluate and determine salaries for Project Managers 0.679 0.266 0.026
Execute specialized tasks for Project Managers, e.g. preparation of schedules 0.723 0.261 -0.211
Supportive 0.672 0.147 0.234
Controlling 0.322 0.577 0.065
Percentage of these projects within PMO's mandate 0.041 0.758 0.230
Percentage of project managers reporting to the PMO manager 0.040 0.784 0.145
The hierarchical level to which the PMO reports is: 0.179 0.557 0.439
The PMO's lack of access to top management (note inverted scale) 0.197 0.130 0.784
Level of the PMO's decision-making authority 0.297 0.398 0.639
Funding for the PMO 0.203 0.360 0.670
 
% Variance 34.10 14.59 14.20
% Cumulative variance 34.10 48.69 62.89
Cronbach's alpha 0.929 0.717 0.767

Note—Factor loadings > 0.50 appear in boldface type.

The third factor, PMO autonomy, includes three variables. The first two variables form a consistent pair associating more decision-making authority with more adequate funding for the PMO. The interpretation we give to the inclusion of the PMO's lack of access to top management is that given a PMO with funds and decision-making authority, this PMO should rarely require access to top management. This PMO is autonomous from two perspectives: money and decision-making.

The analysis excluded three orphan variables from the factors: To what extent did the organizational culture support the PMO, PMO's accountability for project performance (scope, costs & schedule), and PMO's accountability for project performance (benefits).

Impact After the Change

The factor analysis identified three reliable impact factors (see Error! Reference source not found.). The list of variables that were proposed to the respondents to assess the impact of PMO change are the same as the ones considered as issues for change. Following this approach, our objective was to assess whether the PMO change had some impact on the initial issues. The results from the factor analyses show both similarities and differences between the issue factors and the impact factors.

The first element of difference is the number of factors: four factors on the issue side and three on the impact side. Globally, the factor analysis put aside four variables for the impact side to form three quite homogeneous factors.

The portfolio management and methods factor includes the same variables on both sides except for the variable standardization of project management methods that is excluded from this factor.

The second factor on both sides relates to collaboration and accountability, but significant differences exist on variables included or not included on each side. On the impact side, this factor does not include the variable on tensions and conflicts. But it includes two variables on commitment and skills. Commitment is associated with accountability and project management skill level participates to a valuable collaboration within project.

Table 4 Factor analysis of impacts to PMOs

Survey Items Factor 1 Factor 2 Factor 3
Portfolio Management and Methods Collaboration, Accountability and Skills Work Climate and Cost of PMO
Project alignment with strategy 0.766 0.429 0.110
Availability of relevant information to decision makers 0.792 0.337 0.056
Project selection 0.812 0.037 0.180
Allocation of resources across multiple projects 0.724 0.269 0.285
Fit between project management methods and project characteristics 0.691 0.380 0.237
Organizational commitment to project management 0.269 0.797 0.033
Customer and stakeholder relations 0.004 0.634 0.373
Project management and line collaboration 0.212 0.807 0.013
Accountability for projects 0.324 0.705 0.165
Synergy among project managers 0.407 0.572 0.122
Project management skill level 0.444 0.611 0.267
Work climate 0.437 0.377 0.545
Work-family equilibrium 0.295 0.100 0.781
Cost of PMO 0.065 0.085 0.749
 
% Variance 26.73 25.45 13.62
% Cumulative variance 26.73 52.17 65.80
Cronbach's alpha 0.893 0.864 0.675

Note—Factor loadings > 0.50 appear in boldface type.

Two variables have been excluded from the factor analysis on the impact side: project performance and project management maturity. It could be interpreted as if these two variables are part of a factor of issue leading to PMO change, but on the other hand, they are not included in any impact factors from this change.

The work climate factor on the issue side also forms a third factor on the impact side with an additional variable: the cost of the PMO. In the current literature, cost of a PMO is rarely associated with work climate (Kendall & Rollins, 2003). One example, however, is Miranda (2003). These variables on work climate have been added following interviews conducted in Sweden, as part of our case studies research (see section on Methodology). None of the Canadian interviewees' mentioned this issue. Interestingly, Turner and Müller (2006) were confronted with the same phenomenon when doing interviews in Sweden as part of their research on how to choose the right project manager for a project. Only Swedish managers of project managers said that the project manager's ability to successfully balance work and private life is a criterion for selecting a project manager for a project. The logic behind this factor relates to social costs of not respecting equilibrium between family and work. The work climate plays a similar role. The PMO is seen as a locus of coordination for the total individual workload and has a mandate for balancing efforts. Consequences could be lack of quality, absenteeism, burnout, and sickness, all of which could be responsible for generating costs for the PMO through rework, activities for recruitment, and diminishing productivity. Likewise, pressures to improve productivity and control costs may contribute to the deterioration of the work-family equilibrium and the work climate.

Results from Correlation Analysis

The factor analysis has reduced the number of variables considerably. The analysis has identified two contextual factors, four issue factors, three PMO change factors, and three impact factors. The next step in the analysis is to investigate the relationships among these factors using correlation analysis among the factors. Two correlation analyses were performed: analysis of relationships among factors and analysis between the organizational context and factors. Only the former is reported here.

The factor correlation matrix is shown in the Appendix. The table shows the Pearson correlation coefficient and the two-tailed significance test. Correlation coefficients above 0.34 are highlighted.

Overall, there is very little correlation among the factors. Because the Varimax method was used, there are no correlations within each set of factors. There are six correlation coefficients greater than 0.34, of which only one is greater than 0.5. Three of these show a relationship between the issue and the impact factors. When something is an issue that drives a change through a PMO, improvement tends to be observed in this issue. For example, the strongest correlation is between the portfolio management and method issue and improvement on these same issues as shown by the impact factor. The same is true for the issues of collaboration and accountability and of work climate. An obvious result such as this is reassuring in that it confirms the reliability of the data.

The three other correlation coefficients are between 0.34 and 0.40. These are noteworthy, but not particularly strong correlations. The first condition factor, the conditions external to the organization, is related to two other factors: issues related to work climate; and impacts on collaboration, accountability, and skill. The interpretation of the first relationship is quite straightforward. The external conditions are all related to increasing pressure on the organization. As can be observed in most organizations, this increased pressure has repercussions for the work climate and for the work-family equilibrium, as more pressure is put on employees to meet the increasing demands from the environment.

The relationship between external condition and the collaboration, accountability, and skills impact factor mirrors the correlations between external conditions and people's attitudes as a reaction to these conditions. When looking at the variables that make up these factors, we see that the external factors relate to changes in economy, industry, markets, political systems, regulations, social responsibilities, and ethics. They comprise hard factors (such as regulations) but also softer factors (such as ethics) which, we could hypothesize, impact behavior and psychological contracts that individuals have with their customers, suppliers, employers, and colleagues. The impact factor on collaboration, accountability, and skills reflects this hypothesis. It summarizes the variables on commitment and relationships, plus the willingness (or freedom) to take on accountability, and work on the increase of skills in a changing external environment. The positive correlation between the two factors shows that in the context of increasing turbulence in the external environment, there is a greater willingness (or freedom) to take on accountability, collaborate with stakeholders and colleagues, and increase one's skills development, which in turn should impact the management of projects as collaboration, accountability, and skills projects are directly linked to behavioral success factors (Slevin & Pinto, 2004). Interestingly, changes in the PMO did not relate to this impact of collaboration, accountability, and skills.

The only other correlation coefficient greater than 0.34 is that between increases in the importance of the functions filled by the PMO and the supportiveness of the PMO, which are related to improvements in portfolio management and methods. Many of the PMO functions are related to project management methods and this impact factor is also related to methods. This may explain, at least partially, why they are associated.

Figure 3 illustrates the six relationships among factors from the correlation analysis. The general lack of relationships among the factors, other than the obvious ones between issues and impacts, is one of the major results of this study.

Surprisingly, no correlation between the conditions and issues that drive changes to the PMO and the changes that are made within the PMOs were identified. This lack of a relationship between drivers of change and the changes to PMOs means that no pattern was found in the transformations of PMOs. The transformations of PMO would have been easier to understand and manage if such patterns had been identified. The absence of patterns and the fact that each individual transformation is driven by a complex mix of drivers leads to the conclusion that each transformation is driven by the particular dynamics of its organizational context.

Correlations among factors

Figure 3: Correlations among factors.

Discussion

This section aims at making sense from the two levels of statistical analyses: (1) descriptive; and (2) factor analysis and correlation analysis, which were undertaken to answer the research aim of providing a better understand of the PMO transformation process.

Change Management in PMO Transformations

Results from descriptive statistics suggest that a PMO transformation is an important organizational change that does not get sufficient care attention in implementation. It seems not to be considered as a real project of organizational change despite what is suggested as best practices (Dinsmore & Cooke-Davies, 2006; Kendall & Rollins, 2003). Consequently, tensions and conflicts may emerge from this lack of change management, and a decrease in performance might be observed during the period of implementation. Debates seem to take place on characteristics and functions of the PMO while at the same time neglecting the change management, surely more attention to this important ingredient would improve the performance of PMOs.

PMO Transition with Positive Impact on Project Portfolio Management

Interesting significant relations occur within portfolio management. This is shown through two specific correlations. The first correlation appears between issues and impacts related to portfolio management and methods. This positive correlation can be interpreted as if the resulting portfolio management and methods after the PMO change represent an improvement compared to the previous situation. Second, a significant correlation is revealed between changes to the PMO's functions and supportiveness on the one side and, on the other side, portfolio management and methods. This result adds to the previous one in improvement of the portfolio management and method coming out from PMO change in its function and supportiveness. This last result is independent of the existence of an issue related to the portfolio and methods. From this analysis, PMO transition can have a positive impact on portfolio management either in the context of a particular issue or as a result of the change in PMO functions and supportiveness.

A Paradigm Shift: PMO Transformation is Not a Technical Issue

The basic assumption in this research is that relationships exist between conditions and issues leading to a PMO change and the impacts from this change. However, very few correlations were found in the analysis as shown earlier and the ones that were found are not very strong. Nevertheless, this represents an interesting result. Looking back at Figure 3, it is worth mentioning that none of the condition and issue factors have a correlation with the changes to the PMO characteristics or functions. Only one correlation was identified between one PMO change and one impact. This lack of a pattern in the transformations could be interpreted as if the technical aspects of the change (in terms of characteristics and functions) are of little incidence. This result brings into question the emphasis put on right or wrong PMO characteristics and functions. Conversely, it clearly puts more weight on issues driving the changes and outcomes from the changes. These results confirm that a PMO transformation is undertaken as a business response to solve existing issues and that outcomes are expected from this transformation. The choice of PMO characteristics and functions appears to be secondary to outcome expectations. The particular changes to the PMO are most likely influenced by the specific organizational context, and no general pattern of change exists.

Emptying Process and Sustainability

Two recent papers have tackled the more specific question of PMO change. The first addresses a specific pattern of emptying PMO. From the direct participation of seven senior managers from large organizations in a PMO forum, Pellegrinelli and Garagna (2009, p. 5) propose a conceptualization of PMOs through a process of emptying itself. “The process can be conceived as a transfer of value from the PMO to the rest of the organization.” To be successful, the PMO became a change agent for the implementation of project management culture through methods, standards, and tools. After this was accomplished, the PMO could have been unable to justify its survival. At that point, project management is embedded in the organization's routines and processes and taken for granted. But routines and processes need to be updated in order to improve performance and adjust to internal and external changes. The authors recognize the interest of this emptying process; however, the results presented here don't support it directly. Events outside the direct control of PMO managers happen, often with some element of surprise. Tension or conflicts around the PMO get constructed and sometimes diminish the manageability of the organization. The organization and the PMO have to be realigned as time passes. The results show that multiple combined factors may participate in the emptying process.

Conversely to the first paper, the second one addresses the value of PMO through its sustainability (Hurt & Thomas, 2009). The authors suggest thinking of PMOs as instances that evolve in order to keep the value that has been created previously. The evolution of the PMO is one perspective by which one can understand changes that happen in PMOs. However, our findings do not support the value as being sustained from one configuration to the next. But, it is worthwhile to look specifically at the transformation process and understand what are the drivers that lead to this transformation and the consequences or outcomes from it. The recent research confirmed temporality as a dimension of the PMO and that this temporality could be better understood within the external and internal dynamics of the organization. Results confirm that external and internal factors and idiosyncratic issues drive the transformation of one PMO to the next. The temporality dimension raises a paradox between transformation and sustainability. Both coexist in the sense that sustainability should be understood within the transformation process.

Conclusion

This research was aimed at understanding the phenomenon of PMOs in transition in a two-phase research. Empirical results presented in this paper relate to the second phase and had the objective of validating the transformation process with a questionnaire-based approach. The major result from this research relates to a paradigm shift regarding the PMO changes. It provides some empirical evidence that the transition of a PMO from one configuration to the next is not a question of being right or wrong. PMOs in transition can be rather understood as a multi-level, dynamic process anchored in a specific organizational context. However what really seems to make a difference is the change management process to implement a PMO transformation. This is a challenging result for organizations. In many cases, the major focus when transforming a PMO seems to be around the changes in PMO characteristics or functions neglecting the impacts of these changes on people and internal processes. More energy and resources should be dedicated to change management for the success of the implementation and, then, for better PMO performance. Transformation of a PMO is a real organizational project.

From the academic viewpoint, the authors believe that this research has partially filled the void of empirical evidence regarding PMO transitions. The present results will be complemented with more sophisticated statistical analyses, particularly with hierarchical regressions and search for mediator and moderator effects. Also, more is to be done on PMOs or, more globally, on organizational project management. Future contributions from the project management research community should go towards a theoretical anchorage within the theory of organization or other solid theoretical foundations.

Two limitations have been identified within this research phase. The first is the focus on a unique transformation as opposed to a continuous evolutionary process. This focus was essential to understand the process, but it should be understood as a partial view of the reality where outcomes from the transformations contain within them what will become the conditions and drivers for the next PMO transformation. The second limitation relates to methodology. Quasi absence of strong correlations among factors only partly support the results from previous phases of this research, which were based on case studies (Aubry et al., In press). One explanation for the lack of results may be related to the use of a questionnaire to explore a process. Research on process should rather be based upon qualitative approaches answering why and how types of questions. On the other hand, questionnaires relate to a variable approach answering what type of questions (Van de Ven, 2007). From the beginning, it was known that the goal of this research bears on a process. This led to a qualitative study as a start, but results from qualitative research lack the capacity for generalization. There is a need to validate the results of qualitative research through questionnaires. This methodology was adopted here.

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Bios:

Monique Aubry, PhD, is a professor at the Business Science School of University of Quebec at Montreal (UQAM). Her principal research interest bears on project management offices (PMO) and their relation to organizational performance. The results of her work have been published in major academic journals and presented to several international conferences, both research and professional. She is member of the Project Management Research Chair (www.pmchair.uqam.ca). Before joining UQAM, Monique was a project manager in a major Canadian financial group for more than 20 years. She is member of the PMI's Standards Member Advisory Group (MAG). She is involved in the local PMO community of practices where she contributes to reinforcing the links between professionals and researchers.

Dr. Brian Hobbs, PMP, Project Management Research Chair (www.pmchair.uqam.ca), holds a degree in Industrial Engineering, a MBA and a PhD in Management. He has been a professor at the University of Quebec at Montreal in the Master's Program in Project Management for more than twenty years. This program, of which he is a past director, is accredited by PMI's Global Accreditation Center. He has served terms on both PMI's Standards and Research Members Advisory Groups and is currently a member of the PMI-Montréal Board of Governors. He is a reviewer for both the Project Management Journal and the International Journal of Project Management. He has presented many papers at both research and professional conferences worldwide.

Dr Ralf Müller is Associate Professor at Umeå University, Adjunct Professor at the Norwegian School of Management BI, and at SKEMA Business School in Lille, France. In parallel he is Managing Director of PM Concepts AB, a Sweden based management consultancy. He lectures and researches in project management, governance of project-based organizations, as well as research design and methodology. He authored more than 80 publications including five books, several book chapters, and a number of articles in international management journals, as well as conference papers. Prior to his academic career he spent 30 years in consulting large enterprises in project management and governance, e.g. as worldwide Director of Project Management at NCR Teradata. He holds a Doctor of Business Administration (DBA) from Henley Management College / Brunel University and an MBA from Heriot-Watt University, both in the UK.

Tomas Blomquist, PhD, is Associate Professor at Umeå School of Business at Umeå University in Sweden. He is head of research profile on Innovation, Networks and Projects at the business school and Director for the Erasmus Mundus, joint Masters in Strategic Project Management with Heriot-Watt University and Politecnico di Milano. In recent years he worked with research concerning projectified firms and how they organize, manage and control their projects as well as studies in product development and customer projects. Blomquist had been involved in work to coordinate and actively support project management research activities within IRNOP and Svenska ProjektAkademien. Previous participation experience includes product development and renewal projects in both industry and public sector. This also includes activities to access and improve project management and portfolio management systems in firms. He holds an MSc in engineering and a BA in business administration.

APPENDIX

Factor Correlation Matrix

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© 2010 Project Management Institute

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