My career (and more recently my company) has been built on being an independent consultant or voice for those programs or projects that are leaders within the constructs of a Project Management Office. The reasoning is/was always clear to me, but the challenges lay within helping those inexperienced, yet vetted individuals placed into that construct as “the lead” to their organization’s large-scale digital transformation initiatives. I recently came across an article that was touting the benefits of having a PMO in place. So I thought I would share the factoids they present and review from my experiences.
A project management office (PMO) can drastically improve productivity and bring greater clarity to your PM processes, programs and/or projects and increase the likelihood of success. As these project management statistics show, creating a PMO can have substantial real-world benefits:
Only 41% of organizations with an enterprise-wide project management office (EPMO) report that it is highly aligned to the organization’s strategy. However, 72% of organizations with high-performing ePMOs say that there is a strong alignment of the EPMO to their organizational strategy. (PMI)
This is one of the key challenges surrounding a PMO and an associated stigma of PMOs in general. There are an abundant amount of PMOs out there who’s purpose seems to be the “PMO Police” where they are just looking at the governance aspects of the role and whether or not people are following the rules of engagement for their program. These are very “back office” centric activities that are needed, however, should represent less than half the value of what a PMO should be doing.
Today’s ePMOs have to be business-driven, not bureaucracy-driven. Your ePMO needs to be a partner, working with your executives to develop the vision, mission, goals and objectives of your ePMO—together. Your ePMO needs to truly align to an organization’s strategy, helping to determine what portfolios and program under those portfolios can be established to accomplish those strategies. Then, working with your executive leadership, determining the capacity available to execute those programs/initiatives and start making the conscience decisions on program execution sequence to strategic value outcome (your benefits realization process). Your ePMO should serve at the pleasure of the organization, not the other way around. By having a servant leader mindset, you will break down barriers and stigmas of the old school PMOs and truly partner to understand the strategy and objectives of the organization and work together to find ways to balance the people, processes, and technologies necessary to meeting your company’s strategic objectives.
Project management offices remain more popular among larger firms. 95% of large firms (>$1B revenue) reported having dedicated PMOs, either in specific departments or across the entire organization. In contrast, only 75% of small firms (<$100M in revenue) had dedicated PMOs. (PMSolutions)
This statistic saddens me but doesn’t surprise me. My inference to this statistic is that smaller companies just don’t feel they can afford the overhead associated with an ePMO. If your ePMO is truly set up as a partner who is there to serve your leadership and the program execution then I think the smaller organizations should set an ePMO. For example, one of the key challenges in any organization is program demand management. What typically happens within organizations is that everyone wants their program or project executed, and it is usually prioritized by either who is the highest ranking officer, or who is screaming the loudest. The cost associated with this method of program execution can be exorbitant because the organization simply does not have the capacity or skills to execute in this manner—costing smaller organizations significant dollars without an appropriate return on investment—or no return on investment at all. Ironically speaking, larger organizations could probably take a bigger hit at this style of execution simply because they possibly have extra budget/finances to absorb this type of behavior. But most of them choose not to and instead have put in ePMO’s to help properly manage the demand of strategic initiatives not “who is screaming the loudest” initiatives.
The value contributed by PMOs is on the up. In 2016, PMOs delivered a 33% improvement in projects delivered under budget, 27% improvement in customer satisfaction, 25% increase in productivity, and 25% reduction in failed projects. Altogether, PMOs led to $175k cost savings per project. (PMSolutions)
These are encouraging statistics and can only get better as more PMOs become business driven and strategic partners. Additionally I think there are some greater opportunities with integrated technologies out there today that, if leveraged, could double these statistics. For example, with Platinum PMO’s Digital Transformation Implementation Platform we have integrated the entire program ecosystem and have automated a lot of the functions that used to take PMO participants hundreds of hours to complete each month. That time and budget can now be spent on more value-driven efforts thereby further increasing customer satisfaction, productivity, and budget surpluses, while decreasing overall program risks and potential failures.
It’s not always a rosy picture for PMOs. 50% of respondents in a survey said that their biggest challenge is that PMO processes are seen as overhead. 42% said that their organizations are resistant to change and adopting new PM methodologies. 41% said that their biggest challenge is demonstrating the added value of the PMO. (PMSolutions)
This is a big challenge and it primarily stems from the what PMOs used to be when they first started out. If ePMOs truly change their stripes and develop a more customer-centric, strategy-centric approach to their existence this perception will improve. An idea that comes to mind for the PMOs who are currently in this quandary is getting some guidance from an outside firm to help re-structure and re-brand your ePMO. At Platinum PMO we do offer services like this that help take your current PMO through a PMO transformation and help you re-establish your mission and vision of what you want your ePMO to be and then help you with the organizational transformation effort to help with the adoption of your new approach and service offerings to your organization.
Though these are my opinions, I think you will find the alignment in accordance with current trends within our industry as a whole. Again, Platinum PMO’s focus is being not just an organizational toolset within our platform, but also an independent voice of truth for an organization in the throes of a challenging and turbulent chapter in their company’s timeline or growth. Our goal is to assist in making the best choices at the most valuable times in order to have the most desirable outcome possible. Let us know if we can assist you with your program or project.