The Project Management Office (PMO) - a necessary evil or essential function?

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Incredibly, 50% of project management offices close within 3 years (Association for Project Management) and according to Gartner Project Manager 2014, since 2008, the correlated PMO implementation failure rate has been over 50%.

On top of that, the 2013 Gartner PPM Summit found that 68% of stakeholders perceive their PMOs to be bureaucratic. Despite these disturbing statistics, PMOs continue to be created, and companies that provide PMO services continue to flourish. Is it because it’s the job that nobody wants to do? It’s one of those things that executives know that they need, but pay little attention to. Like the UK government, when you’re tired of it not delivering you get rid of it and try a different one!

If you could actually get a PMO to do what you need it to do, it could be a different story.

Many times we come across PMOs in organisations and find that people are on different pages on its purpose and function. This leads to dissatisfaction, friction or under-performance. Sometimes the PMO doesn’t have the authority or status to discharge its purpose. Often it’s over-stretched and at other times is struggling to make up deficiencies in the delivery process.

So getting clarity on the purpose and functions of the PMO in each specific context is a vital step. If you’re stuck, there’s some helpful guidance from the Office of Government Commerce (OGC) that provides a framework for three different types of PMO. Many people are surprised that there is more than one type of PMO, and that there is such a long list of functions. Whether a PMO does all or just some of these things depends on the organisation and the volume and complexity of project work. The most important thing is to AGREE which things you need, and the level of investment you are prepared inject to make sure these things happen. What we often find is that the list of PMO responsibilities grows whilst the appetite for investment in the PMO remains unchanged (low). This is sure to lead to poor quality output and potentially the loss of faith and ultimate closure of the service.

So which is the best type of PMO for you?) P

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A Planning or Portfolio Management Office is usually best placed reporting into the board or CFO, as the prioritisation and benefits realisation is best managed at that level. These PMOs will often be very hands off regarding delivery accountability, but good ones will be probing the quality of business cases and plans to ensure what is being proposed is achievable. One of the best jobs these PMOs can do is to balance the amount of work the organisation takes on vs historical capacity to deliver, and to make sure that the most valuable initiatives are the ones that get support.

The OGC recommended list of functions for this type of PMO is:

  • Portfolio build, prioritisation, analysis & reporting
  • Programme and project setup and closure
  • Stakeholder engagement and communications
  • Planning and estimating
  • Capacity planning and resource management
  • Benefits realisation management
  • Performance monitoring

A Delivery Programme or Project Management Office will either be owned by a director responsible for delivery (often the CIO) or by a Programme Manager on a large programme. Here there is clear accountability for delivery by the function owner or programme manager. These PMOs are more involved with the day to day management of delivery. Their function is to co-ordinate and correlate individual projects or streams of work within a programme to ensure the overall outcomes are actively managed. They have a key role in reducing the risk of poor delivery. Though of course they are dependent on the delivery capability of internal or external agents. The OGC recommended list of functions for this type of PMO is:

 

  • Monitor, review and reporting
  • Risk, issue and change management
  • Finance
  • Commercial (including supplier management)
  • Assurance & quality
  • Information management (inc. configuration & asset management)
  • Transition management
  • Secretariat

Centres of Excellence can be found as PMOs in Change Management functions where pools of Project Managers and Business Analysts work on many projects and their responsibility is to drive higher levels of performance and consistency from the pools of resources, including consistent tools and processes. So in addition to the ‘core’ PMO functions a Centre of Excellence will also provide:

  • Standards & methods (processes & tools)
  • Internal consultancy
  • Organisational learning & knowledge management
  • People and skills

Being clear on the kind of PMO you need is an important first step in making your PMO a valuable resource rather than a bureaucratic function.

For further information contact This email address is being protected from spambots. You need JavaScript enabled to view it.

John Prideaux

Leading Digital Consulting at Wisereach

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