Organisations have struggled for years to deliver projects on-time and within budget, writes Paul Viviers, MD of PMSight. But with today’s emphasis to get more “bang for the buck”, organisations have to rein in projects more closely than ever.
That challenge has led many to turn to project management offices (PMOs) as a way to boost project efficiency, cut costs, and improve project delivery on budget and in time.
Establishing a PMO is not a new solution, and the growing trend toward implementing PMOs to instill much-needed project management (PM) expertise to improve project performance in organisations, is spreading fast.
The PMO is about keeping projects on time and within budget while mitigating risk and balancing project and work management. An effectively run PMO can help decision makers by providing the structure needed to both standardise on project management practices and facilitate project portfolio management as well as initiating methodologies for repeatable processes. PMOs face the rigorous challenge of keeping up with rapidly evolving PM environments.
With today’s technological advances in project management, more is required of the PMOs. Although technology is not the most important element within a PMO, without the technology you’re putting the PMO at severe risk.
The PMO is faced with managing an almost endless demand: from balancing project management work verses work management to ensuring deliverables and risks are weighted and executed. Therefore, using the right technology for the right process is key.
There are three basic models of PMOs: strategic (enterprise), tactical (business unit) and temporary (program). Strategic/Enterprise PMOs, exist at the second level of the organisation, reporting directly to the CEO. This position allows the PMO to effectively facilitate departments in planning and prioritisation of projects.
The strategic insight into organisational objectives and goals allows for active direction of the organisations projects and operational initiatives, driving through value in all departments.
The tactical PMO is situated within a particular business function or department, such PMOs have limited scope and authority outside of their immediate department, often struggling to implement any real change. Many organisations today are multidimensional with cross-functional teams and projects. The tactical PMO is often set up to fail, due to the inability to establish enterprise-wide standards with consistent project management controls, processes and tools which are essential for success.
Temporary PMOs are often associated with specific projects or programs that have some expected end date. They exist to provide structure, management and oversight to only that project or program, and they are disbanded when the program is ended. They have little or no influence outside the program and are measured on the success of the program, not on sweeping organisational change.
How a PMO is organised and staffed depends on a myriad of organisational factors, including targeted goals, traditional strengths and cultural imperatives. When deployed in line with an organisation's culture, PMOs will help decision makers deliver strategic projects that satisfy both the bottom-line and internal customers. Over time — PMOs can save organisations money by enabling better resource management, reducing project failures and supporting those projects that offer the biggest payback.
The first motive for creating a PMO should be to deliver strategic projects with more consistency and efficiency. Many companies entertain a variety of factors for starting a PMO. Most proponents agree that cutting costs or reducing projects by a set amount should not be among them.
PMOs can certainly lead to reduced expenses and fewer projects, but decision makers should expect PMOs to function in the following areas.
* The PMO needs to establish a clear mission and charter;
* Project support, provide strategic project management guidance to project managers in business units according to the goals and strategic direction of the organisation;
* Demonstrate real ROI (Return on investment);
* Communicate frequently and strategically;
* Implementation of process/methodology: develop and facilitate a consistent and standardised process;
* Training programs: continued training and education is essential to hone effective project management skills;
* PMO base camp for project managers: maintain a centralised office from which project managers are loaned out to work on projects;
* Portfolio management: establish a staff of program managers who can manage multiple projects that are related, such as infrastructure technologies, desktop applications and so on, and allocate resources accordingly;
* Internal consulting and mentoring: ensuring project management best practices; and
* Project management software tools: selection of the right project management tools for use.
Each PMO is designed specifically to develop their own tactical/business unit or group and sometimes it’s hard to find those economies of scale. So if you are setting up a PMO or you currently have a PMO, understanding where it should sit could mean success or failure. In addition to strategic alignment we want to make sure that the PMO is meeting the needs of the organisation based on where the organisation is on a maturity scale.
Multitasking on several projects doesn't work, adding that productivity drops every time an employee switches from one task to another. By eliminating multiple assignments, PMOs can boost productivity while ensuring that priority projects get the most attention. For instances if you have about 400 people in a centralised department, one of the key benefits is that the PMO can allocate the majority of its resources to the highest priority projects, ensuring quicker delivery.
For many organisations improving project success rates is a top priority, yet getting the right data to prove that PMOs are working takes time. Project success rates are difficult to define for PMOs younger than 3 years, as they have no track record of success to be measured against. Even then due to the lack of industry benchmark results against comparative organisations, determining costs and savings rates for the PMO is a challenge.
One relatively quick indicator to come by is customer satisfaction among internal end users. Once a PMO is instituted customer satisfaction on projects completed will be an easily accessible gauge as to whether the PMO is or isn’t delivering expected ROIs.
PMOs can perform a critical function within any organisation. Their effectiveness depends on the service they provide. Like any other organisation, a PMO must constantly ensure that it is providing value.