Research findings from Hobbs[2], show that perceived value of having a PMO is higher for PMOs focusing on Monitoring & Controlling, and Standards&Methodology, and less so when focusing on Strategic funtion or Portfolio Management.

PMO-Value-Usdromine

Perceived value depends on what area management & PMs see as needing contribution from the PMO, and this will also depend on the level of PM maturity in the organization. However, we can say that All PMOs, either in passive or active roles, have the main objective to positively affect the project/program/portfolio outcome. That is the basic reason for the PMO to exist, regardless of the variation that may be observed in structures or specific functions.

The PMO value may be realized through better project performance or through some other project, program or portfolio management objective set by management. Whatever those objectives are, we should link them to specific metrics that  will indicate how project management practice and project performance change overtime. These metrics may be:

  • Project performance: delivering on time.
  • Project performance: delivering in budget.
  • Project performance: delivering all agreed products or services.
  • Customer satisfaction: product or service meeting customer expectations.
  • Combination of various metrics in a Balanced Scorecard

Other benefits more related to processes and strategic considerations include[1]:

  • Standardization of operations; efficient and effective operations.
  • Better resource allocation, capacity planning.
  • Quicker access to higher quality project information (progress, risks)
  • More realistic prioritization of work.
  • Company rather than silo decision-making

Metrics to track the PMO value should consider who is accountable and responsible for the specific areas. PMOs have been seen to have bipolar distributions with either very little or very significant decision making authority, and also with either no responsibility on Project Managers, or having all Project Managers reporting to the PMO[2]. The expected benefit from each extreme type of PMO has to be different. In “Lite” PMOs with little decision making authority and where PMs report to Functional Managers, most accountability and responsibility for project performance resides in the Functional Managers rather than the PMO. Political or ownership tensions may arise on different views of project status. The contribution of the PMO to the organization should be clear, with defined functions and metrics according to its level of responsibility.

Parviz[3] gives a clear picture of the problem the PMO should try to tackle and therefore of its value to the organization: the cost of supporting “runaway” projects. If the projects that are running over budget, or late, or facing quality issues, are costing –in any measure of currency, human resource, customer/market share- more than what the organization is happy to accept, then there is a case for wanting a PMO to help to improve project management competencies.

 


References:

[1] Kezner, H. (2003) Strategic planning for a project office. Project Management Journal, Jun2003, Vol. 34 Issue 2, p13, 13p

[2] Hobbs, B. (2007). The Multi-Project PMO: A Global Analysis of the Current State of Practice. A White Paper Prepared for Project Management Institute. PMI. [online with subscription] (URL http://www.pmi.org)

[3] Parviz, F. (2001) Is Your Organization a Candidate for Project Management Office (PMO)? AACE International Transactions, 2001, p7.1, 4p