Nobody knows more about the importance of great project management than an IT professional. Whether it is managing budgets and resources, reducing project failures or simply getting an assignment started on off on the right foot, the IT groups are first to implement smart PM practices.
One of the smartest PM practices that continues to grow, despite the economy, is the set up of a PMO or Project Management Office. Some organizations have a PMO that acts in a consulting role offering guidance, training and best practices. Other companies have an in-hour PMO available to support a variety of internal business units.
Seven things a PMO can do
- Improve project and portfolio management (PPM) by developing the capability to select the right mix of projects to most effectively and efficiently meet strategic objectives.
- Provide project support by building a conduit for project management guidance to project managers in business units.
- Create project management process/methodology by develop and implementing a consistent and standardized process.
- Improve training by developing a staff of program managers who can manage multiple projects across the enterprise.
- Establish a home base for project managers by creating a centralized office from which project managers can work across an enterprise.
- Become internal consultants and mentors by advising employees about best practices.
- Assess Project Management software tools by selecting and maintaining project management tools that will be useful for the capabilities of the staff.
Whichever set-up your organization has in place, a PMO will offer control and accountability, however, you cannot stop there. Putting an "open for business" sign on the PMO door is not going to instantly boost your bottom-line. You have to be proactive and seek out ways to sidestep poor implementations.
What Can You Expect?
First, set realistic expectations. Don't bring in a golden trumpet and herald extravagant returns when you don't have anything to benchmark against.
Increased focus on culture. Many PMOs fail when they are not set up to work in a company's culture. If you look at other important strategic initiatives in your company that were successes, you'll generally find that they worked because they flowed within your business culture. Make sure your PMO does the same. Don't isolate it as some solo test project. Make it part of the organization's very fabric.
The pay off is discipline. You can boost organizational efficiency, cut costs and improve on project delivery, but even more important is the path to get there. The PMO provides discipline that is often lacking in organizations. It helps you to deliver strategic projects with more consistency and efficiency.
Standardization and Sarbanes-Oxley. PMOs can provide the structure needed to both standardize project management practices and improve PPM. A PMO can help your organization determine methodologies for repeatable processes. In the U.S., The Sarbanes-Oxley Act has been a huge driver for the development of PMOs. The Act requires companies to disclose investments that may affect a company's operating performance. Many large projects fall under that definition. With or without Sarbanes-Oxley, PMOs give a company a central brain for project Management and provides companies with a systemic way to keep a closer watch on project expenses and progress.
Time matters. According to a survey by the Project Management Institute (PMI), there is a strong link between the length of time a PMO has been operating and project success rates. The longer a PMO has been operational, the better its results. In this survey, 37% of those companies that had a PMO for less than one year reported increased success rates. Those with a PMO operating for more than four years reported a 65% success rate increase.
According to the survey, the top two reasons for establishing a PMO were improving project success rates and implementing standard practices.
Sounds great! So, where do I begin?
Define your goals. What are your organization's goals and how is the PMO supporting those goals?
Decide what type of PMO you want to establish. There are two basic models: a consultancy hub which provides project managers in business units with training, guidance and best practices; and a best-practices center with project managers on staff who are loaned out to business units to work on projects.
Build a good team with solid leadership and clear ownership. Don't employ people with "down-time" to lead the PMO. Choose strong leaders who have a direct line to you.
Track the PMO's success and share the results. Don't treat the PMO as a top-secret international space mission. Share the mission and its successes, failures and benefits with the entire organization.
Use baseline controls. Decide what you want to track and set expectations for what you want to benchmark against.
Be relentless in your pursuit of performance. Results come from diligence and dogged determination. Support your PMO with clear commitment and support from the senior most levels of your organization.
Avoid the pitfall of making the PMO a purely administrative office. Instead make it a center of change, a catalyst for improvement across your organization with tangible and realistic strategic goals.
Once you have a baseline to measure against, you can see results in less than three years. You'll save money by empowering better resource management, reducing project failures and prioritizing and supporting those projects that offer the biggest payback.
The success of the PMO lies in the hands of those leaders who believe in the power of project management and who aren't afraid to see both the opportunities and the challenges that it reveals. If the vision of the PMO is on the radar screen of senior management, this will give the PMO the support it needs to bring long-term results to your organization.
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About the Author: Michelle LaBrosse, PMP, is the founder of Cheetah Learning, the author of the Cheetah Success Series, and a prolific blogger whose mission is to bring Project Management to the masses.