Do PMOs Actually Work?

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As I visit with clients, one of the most common, and divisive, topics of conversation seems to revolve around PMOs. In my experience, PMOs provide tremendous value when they are managed correctly and operate with the proper intent – that is to facilitate the completion of more projects on time and on budget with the fewest resources, while boosting organizational performance. As of 2014, roughly 80% of US companies, on average, had a PMO of some kind. Obviously, many leaders see the benefit, or at least a perceived benefit, in having PMO guidance, but many organizations are still hesitant.

What complicates the PMO discussion is the fact that many organizations simply don’t understand them. I have clients who view them as too rigid, adding additional “unneeded” oversight, and being too reliant on “meaningless methodology frameworks”. In addition to that, many organizations fail to realize that the purpose of a PMO can vary. A one size fits all approach isn’t the best approach. Also, companies may recognize a need and attempt to implement a PMO, but quickly abandon it if they don’t see immediate results.

First, PMOs do add oversight – which is one of their primary values. Recent studies have shown that less than half of all projects deliver on time, on budget, and with their intended benefits. This can be attributed to a variety of factors, but one in particular is that many projects don’t have an appropriate road map for success. A PMO group can outline a project map, implement an agreed upon methodology, and successfully manage checkpoints to ensure that targets are being hit. Adhering to a “prescribed” method may be met with resistance from within the organization, but PMOs can certainly provide the needed discipline, resource planning, and project focus to enable greater project success rates. The oversight doesn’t have to be rigid or prescribed. The good PMOs will take into account their organization’s culture and mold their frameworks to fit that, being open to input from stakeholders and Project Managers.

Next, the organization needs to determine what type of PMO will best meet its needs. Some PMOs exist solely to staff Project Managers and distribute resources to the business groups. Others serve as an all-encompassing project management cadre, consulting on each and every project, providing training to Project Managers, and establishing an overarching framework to follow for projects. The key to discerning which type of PMO is best depends on your company’s culture, project failures, and the intended goals.

Finally, patience is key. Of firms surveyed, 37% of companies with a PMO in place for less than 1 year reported better project success rates. Companies with a PMO in place for more than 4 years reported a 65% increased project success rate. The greatest gains are realized over time as PMOs integrate with the culture. PMO groups that are allowed the time to gain buy in from business groups and stakeholders are able to more effectively dictate program and project success. The organization that displays patience through the early years of a PMO can reap substantial benefits down the road. Studies show that CIOs should allow 3 years for a PMO to derive benefit.
PMOs are valuable, but they can only demonstrate that value if they are implemented with the right intentions, taking into account cultural aspects of the company, and are given time to develop. It has been recommended that newly formed PMOs start with overseeing well-defined pilot projects with a lot of oversight from business unit Project Managers. This will allow for the right amount of give and take so that both sides are contributing to making the PMO fit the company culture, and not the other way round. At the end of the day, a well organized PMO will help drive project success.