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The Value of a PMOOrganizations around the world are implementing formal project management processes anddisciplines to de...
Project management processes are applied at a project level. Since we assume that the projectitself has some business valu...
Of course, most organizations are somewhere in the middle. They have more than a coupleprojects per year, but not hundreds...
•   The PMO tracks basic information on the current status of all projects in the organization        and provides project...
ReportingOne service that is typically associated with a PMO is common, roll-up reporting on the state ofall the projects ...
subject matter expert on project management and must be able totransfer his or her knowledge effectively to others.Project...
There are many other optional areas where the PMO can provide value. This section looks at anumber of additional PMO servi...
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The Value of A PMO

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The Value of A PMO

  1. 1. The Value of a PMOOrganizations around the world are implementing formal project management processes anddisciplines to deliver their work initiatives on time, within budget and to an agreed upon level ofquality. Part of the ability to execute better, faster and cheaper comes from your ability toimplement common processes and practices across your entire organization. Many organizationshave attempted to deploy common processes by creating a focused Project Management Office(PMO) and giving this organization varying aspects of responsibility for projects and projectmanagement methodology.There are many potential products and services that a PMO can be responsible for, depending onthe needs of the organization and the vision of the PMO sponsor. The group is typicallyresponsible for acquiring and deploying a common project management process to the rest ofthe organization. However, they can also do much more, including training and coaching, projectaudits, consolidated project status reporting, project management certification, portfoliomanagement, etc.A Project Management Office can add significant value to your projects and to your entireorganization. Deploying your methodology is not a trivial affair. If you are really serious aboutyour organization adopting the new methodology, you must structure and implement DeploymentProject(s), taking a long-term, holistic view.There should be no question that your organization will find value in good, sound projectmanagement practices. In fact, the larger the project is, the more project management becomesa requirement for success, not just a value-adding proposition.In general, the value of a common project management process includes: • Reduced cycle time • Reduced delivery costs • Improved quality of project deliverables • Early identification and proactive management of project issues and risks • Better containment and management of project scope • More opportunities to leverage and reuse knowledge • Improved accuracy of estimates • Better communication with clients and stakeholders • Improved perceptions of your organization by your clients • Improved people and resource management • Reduced time to get up to speed on new projects
  2. 2. Project management processes are applied at a project level. Since we assume that the projectitself has some business value, you should be able to show that project management processeshave value if they help you to complete the project within expectations. On the surface, youmight think that if project management is good, then there must be value associated with agroup that will help implement project management processes. However, not all companies viewit this way, and a PMO does not have the same value proposition for every company. For onething, the PMO does not manage projects, and so does not have a direct project connection. It isindirect. The value proposition for a PMO is much looser and more subjective.A PMO costs money to staff and to run. In many respects, a PMO reflects an overheadinvestment. The hope is that the money and time invested in the PMO will be more than savedby delivering projects better, faster and cheaper across the entire organization. In fact, the valueis gained by not only helping specific projects meet their expectations, but by implementingprocesses and practices that allow every project within the organization to be delivered better,faster and cheaper.Most organizations will find an overall cost savings associated with implementing a PMO (versusthe cost savings associated with project work). However, some organizations may find that thesavings in project delivery costs are made up for in the actual incremental cost to implement andrun the PMO. In this case, the other benefits of the PMO should more than justify the valueproposition. This value includes helping projects complete within their estimated deadlines andbudgets, and generally delivering faster than they did in the past. If this value proposition is finefor your PMO, you will still be delivering a lot of value to the organization. However if you findthat the cost savings on projects are offset by the cost of the PMO, and this is not acceptable, itmay point out a need to reduce the size of the PMO to make this value proposition work. An organization typically needs to be of a certain size before the overhead associated with a PMO becomes beneficial. At one extreme, if you only have one project per year, you do not need a PMO since it is much less expensive to provide project management training and support to the one project manager. If you have a handful of projects every year, you may still be able to get by with the few project managers collaborating and agreeing to a certain set of common processes and templates.Now, lets go to the other extreme. Lets say you have a large, diverse organization that delivershundreds (or thousands) of projects per year. In this environment, there may be dozens orhundreds of project managers, each with varying levels of skill and experience. A lack of commonprocesses results in project managers and team members being required to learn new processesas they move from project to project. In addition, no one has any idea whether the company issuccessfully delivering projects in general, and no one knows what anyone else is doing. In thisenvironment, a centralized PMO makes great sense to ensure that all project managers have acore set of project management skills, common processes and templates. The PMO also acts asthe owner of the project management methodology, and the PMO acts as a support organizationthat project managers can utilize for project management assistance. In addition, the PMO canserve as a place for providing an organization-wide view of the status of all projects and canreport on the improvements being made to project delivery capabilities over time.
  3. 3. Of course, most organizations are somewhere in the middle. They have more than a coupleprojects per year, but not hundreds. Each organization needs to look at the number of projectsexecuted per year and make a determination of whether the projects were completedsuccessfully. This internal analysis starts with gaining an understanding of how you executeprojects today, how you would rather execute projects in the future, and how best to get to thisfuture state. If your future state vision is close to your current state, there may not be a reasonto make any changes. However, if you are not where you want to be, a PMO may be theorganizational mechanism to get to this desired state. There are many options to look at forimplementing a PMO. You want to do so in a way that ensures that the group and their missionmake sense for your organization.In addition, one obvious motivating factor for implementing a PMO is the amount of pain that theorganization feels over failed projects. If most projects end successfully without a PMO, theremay not be a strong motivating factor to build one. However, if there is a lot of pain associatedwith project delivery, the organization will be much more motivated to invest resources in a PMOto turn the situation around.At a high level, a PMO is increasingly being viewed as an essential component that enables thesuccess of projects, and hence, the future success of the entire organization. At a more tacticallevel, the value provided by a PMO is summarized below. Although PMOs can be established toprovide a narrow or broad set of services, this list includes many of the common responsibilities afull PMO would perform. • The PMO establishes and deploys a common set of project management processes and templates, which saves each project manager or organization from having to create these on their own. These reusable project management components help projects start- up more quickly and with much less effort. • The PMO builds the methodology and updates it as needed to account for improvements and best practices. Therefore, as new or revised processes and templates are made available, the PMO deploys them consistently to the organization. • The PMO facilitates improved project team communication by having common processes, deliverables, and terminology. There is less misunderstanding and confusion within the organization if everyone uses the same language and terminology for project related work. • The PMO sets up and supports a common repository so that prior project management deliverables can be candidates for reuse by similar projects, further reducing project start-up time. • The PMO provides training (internal or through vendors) to build core project management competencies and a common set of experiences. If the training is delivered by the PMO, there is a further reduction in overall training costs paid to outside vendors. • The PMO delivers project management coaching services to keep projects from getting into trouble. Projects at risk can also be coached to ensure that they do not get any worse.
  4. 4. • The PMO tracks basic information on the current status of all projects in the organization and provides project visibility to management in a common and consistent manner. • The PMO tracks organization-wide metrics on the state of project management, project delivery and the value being provided to the business by project management in general, and the PMO specifically. • The PMO acts as the overall advocate for project management to the organization. This includes educating and selling management and team members on the value gained through the use of consistent project management processes.Part 2DefinitionThe definition process is done first. There are many kinds of PMOs, so you must first go througha process to determine what type of PMO makes most sense for your organization. This sectionexplains the process of determining the PMO mission, vision, clients, products, services, etc. Thisinformation provides the foundation for everything that the PMO subsequently does. This processgives you the information you need to know what you should be doing, who your clients are,what your products and services will be, etc. If you have an existing PMO, but are struggling, thiswould also be the place to revisit. Many times, a PMO will charge off with an aggressive idea ofwhat they need to do, even though their clients and sponsors never validated the underlyingassumptions.RolesA successful PMO relies on people who are performing in one or more roles. Roles are useful toensure that members of the PMO understand what is expected of them. Roles also can ensurethat all of the obligations and responsibilities of the PMO are covered. This keeps the PMO fromthe uncomfortable position of not knowing who is covering what areas. Roles help ensure that noPMO obligations are dropped and that multiple people are not unknowingly doing the same jobs.This section describes a number of roles within the PMO. A very large PMO could end up fillingmost or all of these roles, although certainly one person could serve more than one role. SmallerPMOs may not need to fill all of the roles.DeploymentThis section describes how you would go about deploying project management in anorganization. The larger your organization, the more structured and rigorous your deploymentapproach needs to be. PMOStep assumes that you are implementing project management in alarge organization with multiple departments or sites. If your deployment is less complex, youmay be able to use less of this process or combine some activities to do multiple things as once.Getting your organization or company to become better project managers requires more thanjust training. You need to take into account many other areas to successfully upgrade projectmanagement skills. Whenever you change how people do their jobs, you will find some level ofresistance. Therefore, you need to use techniques that facilitate organizational changemanagement. This section contains a holistic approach to implementing project managementmethodology within an organization.
  5. 5. ReportingOne service that is typically associated with a PMO is common, roll-up reporting on the state ofall the projects being executed within the organization at that time. This service might alsoextend to keeping metrics on historical projects so that you can track how successfully projectsare being executed over time. In the same way, the PMO may be asked to track the backlog ofprojects that have not begun to provide your management stakeholders with a complete,portfolio-wide view of all active, pending and historical projects. It is possible, in fact, that themain purpose of your PMO might be to provide this type of consolidated reporting, although mostPMOs have other responsibilities in addition to this.Methodology ManagementMethodology refers to the processes, procedures, templates, best practices, standards,guidelines, policies, etc. that you use to perform certain aspects of work. All of these "methods"that you use to manage projects become part of your project management methodology. Themethodology provides the framework that your project managers use to manage the work. Itmust also be adaptable to meet the changing needs of the business, and it must add value to theprojects that utilize it. In addition, as new technologies and methods emerge to better the projectmanagement process, the methodology should evolve to reflect those improvements.Project management methodology should be viewed as a product. The processes, templates,training, etc. that make up the methodology are some of the specific deliverables that areproduced as a part of this “product”. These deliverables and the product in general, need to besupported and improved over time.TrainingTraining is one of the premiere services offered by PMOs. In fact, in many organizations, theprimary role of the PMO is to offer project management training to the staff. However, there is alot to consider when rolling out a training program. Like many of the services offered, trainingmust be considered holistically, along with any other services that the PMO is offering. If youhave the resources, and if your pool of project managers has the need, you will want to putclasses together to create an overall curriculum. The curriculum can include internal classes,vendor classes, computer based training, etc.CoachingCoaching refers to working with individual project managers orproject teams to transfer knowledge and teach new skills. This isusually done in-person, but can also occur over the phone orthrough emails. Coaching is different than training in that trainingimplies a formal teacher-pupil relationship and the formalinstruction of material. Coaching is less structured and usuallyinvolves talking through situations that affect the trainee anddescribing or demonstrating how project management processesand techniques can assist. In general, the coach should be a
  6. 6. subject matter expert on project management and must be able totransfer his or her knowledge effectively to others.Project AuditsThe PMO is asked to perform the difficult job of changing the organizational culture regardinghow to manage projects. This involves a holistic approach addressing people, process andtechnology considerations. Many of the services provided by the PMO, such as coaching andtraining, are designed to build capability and increase skill levels. Project audits are one way forthe PMO to validate that the project teams are utilizing the appropriate project managementprocesses. If a project manager chooses to take advantage of the audit results, the audit can begreat opportunities for learning.RepositoryOne of the value propositions for deploying common project management processes is the abilityto reuse processes, procedures, templates, etc. This reuse also extends to the level of actuallybeing able to reuse specific documentation from prior projects. However, the ability to reusedocumentation does not come about by magic. If project managers want to see whether theremight be pre-existing material that would help them, they are not going to be expected tocontact every other project manager. To facilitate process and document reuse, the PMO needsto establish and manage a document repository.Metrics CollectionThe PMO must collect metrics that show how effective the PMO is at delivering services, and howwell the organization is adopting the new processes. The PMO must also attempt to collectmetrics that show how the organization is benefiting from the services of the PMO. If the PMOdoes not attempt to track and quantify some of these benefits, the organization will have no ideawhat value has been provided. In general, the metrics associated with project management valueare also indirectly indicative of the value of the PMO. If the value of project management isunknown, then the value of the PMO will also likely be unknown. On the other hand, if the valueof project management can be proven over time, then the value of the PMO (which is buildingproject management capability) will also have been validated.Organization AssessmentsDespite the best-laid plans, it is not a given that new project management processes will becomeembedded in the organization. The people in the PMO have a lot of touch points with projectmanagers and team members throughout the organization. They can use these touch points togather feedback on how well the processes are being integrated. However, this is not going toprovide a full picture of what is going on. The PMO should look at the organization on a periodicbasis and perform an assessment as to how well the project management processes arebecoming integrated into the work routine. These assessments are compared to the priorassessments to gain a sense for the progress made. This information is especially interesting tothe sponsor and other management stakeholders who want to understand how the deployment isgoing.Other Responsibilities
  7. 7. There are many other optional areas where the PMO can provide value. This section looks at anumber of additional PMO services. These services can be initiated at any time during thedeployment process, or they can be started once the initial deployment is complete and the PMOis in a more mature support role.

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