New research into PMO effectiveness
Posted by Elizabeth
A new study shows that there has been a major shift in the role of the Project, Program and Portfolio Management Office (PMO). PMOs are playing a more strategic role beyond project management, including managing all planned work and resources. The wider responsibility of a PMO includes a wide range of management services such as strategic planning, IT service and application management and budgeting.
The research also shows that PMOs are becoming a hub in an organisation, focusing on general business processes. However, the main tasks undertaken by a PMO remain programme and portfolio management, process improvement and high level reporting or dashboards.
As the role of the PMO has widened to encompass other areas outside of project and programme management the profile of the PMO team in the organisation has also changed and over 55% of PMOs report to C-level executives.
The biggest organisational challenge facing PMOs was recognised as departmental silos. This isn’t surprising: as PMOs take on responsibility outside project management they will come into contact with people from other departments. PMOs can be a driving force in standardisation and ensuring good communications between departments, but it looks like there is still a long way to go.
During 2009 most PMOs plan to improve their reporting capability, although the survey was done before the economy took a turn for the worse, so it remains to be seen whether or not they will make any progress this year. Reporting is not perceived to be a ‘value-added’ option for executives: having good project dashboards doesn’t make your company any more money (although I would argue that it’s indirectly responsible as quality reports will show you which projects are worth doing). This is likely to be one of the improvements that gets cancelled this year.
The analysis also looked at what traits make a good PMO. The clearest denominator of success was process maturity: nothing surprising there. The better the processes, and the more widely adopted they are, the easier it will be for a PMO team to do a good job. There were some other points identified that help to make an effective PMO. In summary, an effective PMO has:
- Four or more staff: the team requires a “critical mass of skills and staff effort” to be able to operate well.
- A scope that extends beyond project, programme and portfolio management: rolling other functions under the PMO banner provides the opportunity for integration and breaking down those inter-departmental silos.
- Responsibility for more than just routine administrative tasks, including service management and change management.
- Executive level sponsorship.
- Operated for three or more years: the more mature the PMO, the better it performs.
- Responsibility for owning and measuring departmental processes including data collection, analysis and reporting.
Does your PMO fulfil all these criteria? If not, you might consider taking on board some of the recommendations from the study’s author, Terry Doerscher, Chief Process Architect at Planview. He recommends benchmarking your company’s PMO. Once that is done you can establish any processes that are not currently in place. This will mean it’s easier to control the work across the organisation and see the big picture, which means you can better react to the impact of work across the company on the operational challenges facing the business.
He also suggests putting in place a system of continuous process improvement, which is easier said than done. Finally, Doerscher recommends that everyone is clear on the objectives for the PMO and understands its role and the value it can bring to the organisation as a whole. Part of this needs to be making sure that the PMO team is not spending their entire time on admin: they need time to work on things that really do add value, such as aligning work to the business management objectives.
Over 450 organisations were involved in the study, which was commissioned by Planview and conducted by OpenSky research. You can get a copy of the study results here.
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Tags: analysis, Business, change, Communication, management, manager, PMO, project, research
8 Comments to “New research into PMO effectiveness”
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Dennis Stevens says:
Great post. PMI has just published a edition of the Organizational Project Management Maturity Model (OPM3). OPM3 supports a alignment of your project management management practices with your business strategy and continuous process improvement approach to portfolio, program, and project management. At first glance it looks very heavy, but through focusing and understanding, it is a mature way to rapidly implement organizational project management processes that support your business. The standard is available from the Project Management Institute (www.pmi.org).
Daria says:
Your know, I actually think that better processes can be catalyzed by technologies. This idea was mentioned in one of Andrew Filev posts: http://www.wrike.com/projectmanagement/09/08/2008/Can-Adoption-of-Project-Management-2-0-Tools-Guarantee-Success-of-Your-Projects
Elizabeth says:
@Dennis: Thanks for pointing this out, I’ll have a look. The OGC in the UK has also just released a new standard for portfolio offices (P3O) which builds on processes to deliver business value.
@Daria: Catalysed, yes, but people will also be more important than technology in my opinion. You can put technology in place to help, but if the people don’t want to follow the processes or don’t understand them, they won’t use a tool to help.
Brian Tarry says:
Hi Elizabeth
Many thanks for this – a great post as Dennis says. It is indeed very timely from my point of view as Projects Office Manager at The IET. Your summary reflects the shift I’ve been making in the responsibilities of my PO over the last two years, which this year I am planning to make more visible and to accelerate, and I will be looking at the conclusions and recommendations carefully.
Just on the reporting, I do indeed see this as a key area for development, with which fortunately my FD and CEO concur, and I will be following this through this year.
I’ve also been following the OGC P3O with interest, and it would be interesting to hear what others think of this. Thanks also, Dennis, for the info on the OPM3 – I’ll also take a look at this
Besr regards
Brian
Randall L. Englund says:
It’s good to see data confirming the value that PMOs offer. When I co-authored the book on “Creating the Project Office: a Manager’s Guide to Leading Organizational Change,” one point we wanted to make extremely clear is that PMOs need to be established and maintained to solve real business needs. It’s easy to just do reporting, and it’s extremely hard to do project portfolio management. Somewhere in between is a set of activities that bring the greatest value.
PMOs need to be living organisms that live and die with the needs that they serve. When all around them can attribute success in executing strategy to PMO contributions, you’ve got a good thing going. Let’s keep sharing the good news.
Thank you.
Randy Englund, http://www.englundpmc.com
Steve Rollins says:
Nice post but not really new news! PMOs have been around since the building of the Pyramids. The Egyptians realized the value in management organization for multiple concurrent projects. Somehow, many organizations are have only recently rediscovered this.
Brian Tarry says:
I agree, Randall, and, yes, the point about solving real business need did come out clearly in your book – which I found an invaluable guide when I was setting up the IET Projects Office, and still refer to now as I develop the Office further. Thank you.
As you say, Steve, perhaps not really news to those of us in the know, but there are many – including in my organisation – who are not aware and need to be to help ensure the optimal benefits of a good PMO, and studies like this are useful ‘ammunition’.
Paul Dandurand says:
I attended the PMO CBP Summit 2008 and have since spoken with a number of PMO directors. A common thread seems that many PMOs lack power to make decisions and implement. These directors are covering more of the enterprise and have a lot on their plate. The CBP Summit PMO survey result (see link below) noted that resource management was the top priority and was a challenge among different business units (portfolio management came in 3rd). Even with resource management and other best practices, many PMOs seem to feel they are not taken seriously since they haven’t been given needed political and policy power. I hope to see the PMO become a dotted line to the CEO. This structure may be needed to really breakdown silos across the enterprise.
PMO top challenges survey results – http://piematrix.com/blog/blog/2008/08/17/pmo-survey-resource-management-as-top-pain/