Strategic PMOs

PMOs that focus on process, tools and report formats are out of step with the needs of executive management and unlikely to survive.

Value is created through the alignment of projects with the goals of the organisation and best-practice PMOs go beyond alignment with strategic initiatives; they are involved in creating and implementing organisational strategy.

The type of measurements that matter in this environment focus on measures such as ‘Return on investment (ROI)’, benefits realised, risk profiles and payback periods. Simplistic measures such as time and cost performance, use of processes, courses run and the number of qualifications achieved are not sufficient; and in themselves are largely irrelevant.

Processes and staff training are a means to an end, not an end in themselves! What matter is measures that demonstrate the qualified staff, applying the processes, are more effective at delivering valuable outcomes. Good processes improve efficiency and reduce error; bureaucratic processes reduce efficiency and drive up costs (see more on process improvement).

But even that is not enough! These elements only look at doing projects ‘right’. Successful PMO leaders cite project alignment to strategic objectives as the top-rated PMO function that has the greatest potential for adding real business value to their organisational activities.

As part of PMI’s Thought Leadership Series, PMI in partnership with the Economist Intelligence Unit, Boston Consulting Group and Forrester Consulting, has examined the changing role of PMOs as they shift emphasis away from process and towards the more important role of contributing to value delivery. Their reports can be downloaded from: http://www.pmi.org/Knowledge-Center/PMO-Thought-Leadership.aspx

There’s a lot of reading in these reports – maybe a good use of any excess holiday time…..

For more of out thoughts on PMOs see: http://www.mosaicprojects.com.au/PM-Knowledge_Index.html#OrgGov4

PMO Survival

Research by Dr. Brian Hobbs, University of Quebec at Montreal, Quebec, Canada published in a White Paper prepared for the Project Management Institute (PMI) highlights the precarious existence of the majority of Project Management Offices (PMOs). Approximately half of the PMO’s in existence are seeing their relevance or very existence questioned.

Whilst PMOs have been popular since the middle to late 1990’s and new PMOs are being created at a relatively high rate; PMOs are also being shut down or radically reconfigured at a similar rate. As shown in the figure below most PMOs in existence today are rather recent creations. The sample suggests more than half the PMOs in existence today (54%) were created in the last two years and only 17% have been in existence for more than five years.

This data suggests a PMO often has only a short time to demonstrate its ability to fit into the organisations culture and create value before it is restructured or closed down. We have looked at some of the issues and challenges associated with PMOs in a Mosaic White Paper ‘PMOs’.

Based on years of observation, the key to achieving an effective start up for a PMO has more to do with the PMO’s management being able to effectively manage their key stakeholders, particularly in the executive suites than any methodology or reporting processes the PMO may import or develop. For more on this see the numerous papers we have published [paper listing]. The key message is technical competence is never going to be enough to justify the existence of a PMO.