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Few Companies Have A PMO

Posted on | July 1, 2009 | 3 Comments

With the maturity that project management has in this day and age there are few companies with a PMO group and I have not been able to explain the reason why even though I can think of many.

The one reason that always comes to mind first is the lack of understanding out there of what the role of the PMO should be. Organizations all over ask the question: why do I need a PMO? Really, why? Is this just another administrative and bureaucratic function that brings no tangible results? More than a year ago I wrote “An Effective PMO” where I say that “…PMOs have become just another bureaucrat, bottleneck, rigid, ineffective group that serves the wrong purpose.” But, could this be the reason?

The main reason for a PMO is not to manage projects as this is the work of project managers. An effective PMO provides what no other existing team or group can provide the organization:

• Portfolio management support

• Information repository

• Rescues

• Mentoring

• Prioritization management

• Resource management

• Planning and forecasting

• Information management

• Processes and methodology

• Training in program/project management

• Accounting and financial analysis

• Knowledge management

• Assessments

• Program/project management certification

When a PMO is proposed, one of the benefits that is most touted is cost savings. While this may be true, it is also overly overrated at proposal time and if it materializes at all it is at a later time. What is never mentioned is the fact that a PMO is about staying in business, and this is really what effective PMOs provide through the above functions, having a policy of inclusion, knowledge sharing and of breaking silos. Difficult to quantify? Yes, it is very difficult to quantify and to sell but it is an investment that requires discipline and time to implement to reap the benefits.

Groups and even executives within an organization also selfishly see a PMO as a threat to their own existence because it means releasing some of the control they have had. Selfish because they are not looking at the bigger picture: organizations that don’t have a PMO can lose focus and control of projects.

I have seen companies giving in to the pressure of creating a PMO, create the PMO and then have the PMO slowly diluted and dissolved so that they can say “we tried and it didn’t work”. In reality, the PMO was probably not performing the functions mentioned above.

Are you ready for a PMO? Most organizations are. Don’t you think so…? Well, I do.

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3 Responses to “Few Companies Have A PMO”

  1. Peter Burg, PMP
    September 3rd, 2009 @ 10:28 am

    My experience is that a PMO is bound to fail unless a highly qualified and experienced project manager is running the PMO. I have been with two companies that have started a PMO just to have it fail miserably. They thought that the only function of a PMO was to provide a methodology and support it. Meanwhile, neither organization used an enterprise project management tool, they reported project progress using either MS Excel or MS Access, they did not manage resources; in other words, the organizations did not know what services were to be provided by the PMO.

    This is a shame. I set up a PMO within one organization. At first I heard nothing but complaints from people who resented having to manage projects using an enterprise system. The next hurdle was that people had to use a standard methodology which started with gathering requirements instead of jumping into the project with only a charter. The consensus continued to deteriorate until costs started decreasing, quality started increasing and timelines were more than a number on a scorecard. Then the PMO was recognized as an asset instead of a liability.

  2. Directorio de Empresas
    September 4th, 2009 @ 3:09 pm

    I like this post, very very interesting! Regards.

  3. Elaine Lambert
    August 2nd, 2010 @ 8:39 am

    I’ve seen several interesting comments on various Forrester white papers on this subject, and have a few comments:

    Realizing and Proving the Value of a PMO:

    1. “Today’s PMO’s are under pressure to be business process change agents that demonstrate value without generating revenue.”

    2. “Cost centers are hard to justify. In conversations with PMO leaders, a common theme immerged: Project success is more common with a PMO in place. But because PMOs are not seen as direct contributors to revenue generation, they are often under duress to continually prove their value. If an organization doesn’t make value realization a regular part of its process, keeping the PMO in existence is difficult to justify long term; low-performing PMOs tend to last only approximately 3-5 years.”

    3. “Business is demanding greater transparency; without it, it will begin to find its own solutions. Today’s economy forces CIOs to demonstrate greater value…”

    4. Organizations committed to project management excellence in the form of repeatable processes, useful tools, and organization support have found that meeting critical objectives is well within their capabilities – in large part because their PMOs have provided critical support.”

    Obviously it is important to be able to measure, and therefore “prove”, that the work that the PMO is doing is truly valuable to the organization and its strategic goals. Many organizations are struggling with ways to show that value. In addition, at times, certain metrics can be “manipulated” to show the desired result. A simple example – the focus is on delivering on time and on budget. If the scope isn’t extremely clear, changes aren’t tracked and matrixed, and testing doesn’t tie all the way back to the detailed requirements, it’s possible to manipulate the scope for the purpose of meeting a deadline, and keep it under the radar. Executives are becoming wise to such and are demanding more transparency in reporting. They are also considering other measurements than project performance. IF the primary goal is cost-savings, then metrics that demonstrate such are important. If the organization already has core values and goals other than simply the obvious short-term cost savings, such as quality, project management maturity, or process alignment, then the focus can be on measurements and metrics to demonstrate achievement in those areas as well. I work with organizations to evaluate the various maturity models, best practices, and management frameworks available to them for the purpose of building or rebuilding their foundation. Using these, they can regularly assess various work efforts, and demonstrate measurable, auditable progress and value. In addition, these assessments provide the data needed to make course corrections, if necessary, due to changing priorities or the identification of non-valuable activities. As an organization becomes more mature, they learn what is most effective for them, and can rebuild their process framework as they go.

    Continually Increasing the Value of the PMO through Maturity

    5. “Realize that governance does not mean “overwhelm them with paperwork and templates.” While certain policies, such as those regarding variance metrics, customer satisfaction, cost, and resource constraints, are necessary, the PMO cannot dictate every move a project team makes. The PMO should develop useful, delivery-focused processes and tools that provide guidance; its focus should be on removing barriers and upholding transparency.”

    6. “…strict adherence to a monolithic framework is the fastest way to become a bottleneck, not a change agent.”

    7. “… should exist to facilitate and to remove barriers, not to drown their stakeholders in methodology.”

    8 “A successful project management framework takes the practices from multiple methodologies and strips away what is unnecessary.”

    9. “Strict adherence to one set of rules prevents managers from adapting to situations that may require broader thinking.”

    “Agility” is the buzzword of the day! As project management maturity is increased, and organizations have valuable metrics that demonstrate the effectiveness and value of various processes, activities, and initiatives, they have the opportunity to make course corrections to improve maturity and agility further (and therefore quality, efficiency, cost-savings, etc.). Solid best practices with regular assessments provide the data they need. Couple this with wisdom, flexibility, and willingness to change and the sky is the limit as to how valuable a PMO can truly be to their organization!

    Utopia and The Next Generation PMO

    “PROCESS ALIGNMENT across all of IT (Portfolios, Programs, Projects, Operations, Maintenance, Service, and SDLCs) will be major focus of the Next Generation PMO Framework.”

    Much has been written lately about obtaining process alignment in all areas of IT. New development projects often only take up 1/3 of an IT Department’s entire spend. The other 2/3 is spent on operations and maintenance of existing applications. The question is “How to take the processes and best practices that have been successful in managing projects and transfer that to the management of ongoing initiatives.” Hmm… I have my own thoughts, but would be very interested in the opinions of others – is it possible? Is it appropriate?

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