When a project management office (PMO) is leveraged to its full potential, it can foster strategic alignment, improve project performance, develop future project leaders and support the success of the entire organization. But if that same PMO is left to languish without leadership and support, it can become a burden on the bottom line.
Overall, it's clear that PMOs help organizations increase their project success rates. PMI's Pulse of the Profession™ report found that 65 percent of projects at organizations with a PMO were successful, compared to 56 percent at those without one.
However, not all PMOs are created equal. A November 2012 survey by The Hackett Group showed just how uncertain the world of PMOs can be. The two-year study of 200 large global organizations found that those with high PMO use had higher IT costs, and failed to deliver projects with higher ROI.
“When many PMOs first begin, they're small, tactical and agile,” says John Reeves, IT advisory leader at The Hackett Group, Miami, Florida, USA. “But as they grow, they can get fat and bloated, they become too bureaucratic. The more people and responsibilities organizations throw at them, the more regulation becomes necessary, and the more difficult it is to get things done.”
There's good news, though: The Hackett Group study found that world-class IT organizations, which operate at 15 percent lower costs and higher effectiveness levels than typical companies, still rely heavily on PMOs and use them for over 95 percent of application development and infrastructure projects. The Pulse study also found that 78 percent of high-performing organizations, where 80 percent or more of their projects are successful, have a PMO, as compared with 67 percent of low-performing organizations, where 60 percent or fewer projects are successful.
Thus, the challenge facing organizations is not just how to implement a PMO, but how to implement a PMO that works. And a PMO is successful when it works towards delivering concrete strategic benefits to the organization.
“If the role of the PMO is not well-defined or if the PMO is not well-aligned to the needs of the organization, all its efforts will be focused on delivering services that are not really used,” says Frederic Casagrande, PMP, head of PMO at defense-technology firm Emiraje Systems, Abu Dhabi, United Arab Emirates.
There are several practices to help organizations keep their PMOs focused, improve their effectiveness and ensure they're supporting—not sinking—the bottom line.
PHOTO BY CLINT MCLEAN
“If the role of the PMO is not well-defined or if the PMO is not well-aligned to the needs of the organization, all its efforts will be focused on delivering services that are not really used.”
—Frederic Casagrande, PMP, Emiraje Systems, Abu Dhabi, United Arab Emirates
Jihan AlSherif, PMP, head of PMO at Qatar Airways, Doha, Qatar, witnessed firsthand how a PMO can fail when it is isolated from the business it supports. In that case, the role of the PMO was not understood or communicated, and it was more focused on the process of project management than delivering on the organization's goals.
To avoid such a scenario, Ms. AlSherif recommends engaging with business owners to ensure the PMO's work aligns with the organization's strategic goals. Particularly during the first six months after launch, the PMO's leadership should hold regular alignment meetings to better understand the organization's history, politics, and past successes and failures—and to get to know its people.
“Be nimble, flexible and realign continuously with your organization's strategy. Processes are necessary, of course, but be results-oriented rather than only process-driven.”
—Frederic Casagrande, PMP
“The PMO is not an operational entity with a set of work instructions and pre-defined goals and objectives,” she says. “The PMO should really take the time to understand the context it's a part of.”
With that in mind, Mr. Casagrande recommends writing and distributing a comprehensive outline of what, exactly, the PMO will and will not do, and align it with the company's mission statement.
Once the PMO's strategic goals have been defined, its leaders need to outline the standards, processes and practices that projects across the organization will follow. Yet, while standardization gives a PMO the tools it needs to run like a well-oiled machine, empowering project managers to customize processes to meet their immediate needs can also improve efficiency, says Jaynee Lafferty, senior program manager at Kongsberg Oil and Gas Technologies, Houston, Texas, USA.
“There should be a well-disciplined framework with performance expectations, but it should not constrain collaborative or iterative delivery,” she says.
In addition, project leaders should regularly revisit the standards they put in place to see what's working, what's not and what additional needs may need to be addressed.
“Be nimble and flexible, and realign continuously with your organization's strategy,” Mr. Casagrande says. “Processes are necessary, of course, but be results-oriented rather than only process-driven.”
Ms. Lafferty points to measurement and account-ability as the primary drivers of an effective PMO. Project managers are self-monitoring, metrics are built into the delivery tools and an expectation of continuous improvement is built into the culture.
66 percent of projects at organizations with a PMO were successful, compared with 60 percent at those without one.
78 percent of high-performing organizations have a PMO, as compared with 67 percent of low-performing organizations.
Organizations with ongoing training for project staff reported that
66 percent of projects successfully met their goals, compared with 57 percent of projects at organizations that do not invest in training.
Source: PMI's Pulse of the Profession™
“The biggest benefits from a PMO rely very heavily on individual discipline, including clearly defined roles within the project team,” she says. “It should be expected, then, that the PMO itself model good discipline by starting out with clearly defined expectations, success criteria and measurement to assess effectivity.”
To measure the PMO's effectiveness, Ms. Lafferty recommends taking a “before” shot of the portfolio's time, budget and quality delivery profile, and then taking an “after” shot of those same measurements after each delivery or release cycle.
“Charting this kind of improvement is also a great way to keep people engaged and supportive of your PMO,” she says.
Ultimately, execution is everything, which is why top-performing organizations invest in the training and development of their project talent.
According to the Pulse study, ongoing training on the use of project management tools and techniques directly correlates to better project performance. Organizations with ongoing training for project staff reported that 66 percent of projects successfully met their goals, compared with 57 percent of projects at organizations that do not invest in training.
Training can come from conferences, seminars and tutorials, but it can also come from within the PMO itself. For instance, the PMO can leverage its comprehensive knowledge of the organization's project talent to spearhead a mentoring program, creating partnerships based on strengths, weaknesses and experience. PMO leaders can also host Q&A sessions, face-to-face feedback meetings and brown-bag lunch discussions, Ms. Lafferty says.
When used together as a part of a comprehensive PMO strategy, these tactics can help increase an organization's project management maturity and boost its bottom line. But to support the organization in the long-term, the PMO needs to continually look for new opportunities to bolster the organization it supports, Ms. AlSherif says.
“The success of any practice is dependent on how it adapts to the organization's specific needs and its current maturity,” she says. “As the organization grows, the PMO must adapt before leaders can take it to the next level.” PM
“The biggest benefits from a PMO rely very heavily on individual discipline, including very clearly defined roles within the project team.”
—Jaynee Lafferty, Kongsberg Oil and Gas Technologies, Houston, Texas, USA
Join the discussion! Visit PMI's Program Management Office Community of Practice at pmo.vc.pmi.org.
