PMOs have become commonplace and are often known as Portfolio Management Offices, Program Management Offices, and Project Management Offices. They should boost project and investment performance and reduce risk, right? Maybe; it depends. PMI’s Pulse of the Profession™ reported that, while PMOs are increasing, there was evidence that having a PMO does little to improve project success rates. This finding was communicated in PMI Community Post, February 25, 2013, and the article further stated “It is not surprising, therefore, that many PMOs have a short ‘shelflife.’”
Many additional reasons for short “shelflife” are suggested in a global, multi-year study reported by Hobbs and Aubry (see Reference section). For example, they write “The PMO is an organizational innovation that is a recent and important phenomenon. But if it is an innovation, it is unstable and still evolving.” (Page 162) They further state:
Tension emerges naturally on the issue of control of projects. In some organizations a distinction is introduced between monitoring and controlling. Many PMOs monitor project progress and performance. Some are limited to the monitoring function, while others have a role to play in controlling projects. Tensions emerge when PMOs exert control over projects for which they do not have primary responsibility. In some situations, PMOs are allowed to report information on projects, to ask questions, to integrate information by portfolio, but are not allowed to make judgments and even less to dictate actions on projects. This leads to a paradox where a PMO cannot take action but at the same time can be criticized for its inability to affect project performance. (Page 156)
In its introduction to the book by Hobbs and Aubry, the Project Management Institute states “…, the authors address the roles that PMOs play in organizations, which provides valuable insights for better creating, structuring and governing PMOs. When designing a PMO, an organization has a variety of choices regarding the PMO’s structure and role assignment. By providing a way to define PMOs by type, this research explores how to set up and define a PMO, depending upon the specific type of PMO The authors discuss the many bases for the types of PMOs, including structural characteristics and functions, and how these types affect the PMO’s role in the organization.”
The variety of purposes and roles of PMOs can lead to confusion and misunderstanding at the enterprise level. As Prasad Kamath is quoted as saying in the PMI Community Post cited above,
“One thing that I have seen missing is a sound understanding of what exactly a PMO is,” he says. He has rarely seen a charter for a PMO signed off by executive management.
The Problem
The PMO can be one of the most incorrectly managed and underutilized portions of an organization, according to ProjectSmart.. Findings presented at the 2010 Gartner ITxpo indicate that nearly half of all PMOs result in failure. The question, then, is why do such a drastic number of businesses feel that their PMOs do not deliver value?
The P2C2 Group’s viewpoint is that PMOs need enterprise-level leadership and oversight. We are not suggesting that all PMOs in an organization must be alike, or have the same functions, or the same structure. However, there is value in making conscious decisions about each PMO’s role, its charter, its estimated lifespan, and how it supports the overall enterprise IT management strategy.
PMOs can be expensive, both in terms of personnel assigned to them and the amount of work required by others to respond to PMO monitoring and reporting requirements. If the enterprise treats each PMO as a project—an investment—it can be evaluated in rational terms: objectives, scope, costs, benefits, risks, executive sponsorship, plans, execution, and control. Each can also be evaluated in terms of value to the organization and stakeholders.
In such a context, an enterprise has a portfolio of PMOs. It is incumbent upon enterprise IT leadership to manage this portfolio on a continuing basis. Since some PMOs are embedded in programs or large projects, it may be necessary to take a matrix management approach, where such a PMO is reviewed both in the PMO portfolio and as part of the portfolio in which it is embedded.
Given that PMOs are generally “projects” with a defined timeframe or duration, it is important to view the completion and termination of a PMO project as normal—and not necessarily an indicator of failure. Moreover, individual PMOs may evolve and encompass changes in roles or workloads. These changes should be treated like other projects, with transparent management decisions authorizing modification of the performance measurement baseline.
The Solution
Enterprise IT leaders should organize a portfolio of its PMOs and develop policies and processes for their authorization, establishment, oversight, performance review, enhancement, and (when appropriate) closeout and termination. The portfolio management framework should be flexible enough to encompass PMOs with varied roles and timeframes.
We recommend the following overarching principals for managing PMOs:
- Oversee all PMO investments at the enterprise level as a portfolio
- Identify, assess, and monitor PMO and PMO-like functions within the overall enterprise
- Increase the visibility of the PMO portfolio in the governance process
- Treat each PMO investment as a project
- Harmonize enterprise policies and practices with PMO operations
- Support, develop, and promote a vibrant PMO culture including use of best practices
- Make decisions about PMO investments as part of the capital investment process—initiate those needed to support priorities, modify those that need to be strengthened, consolidate those which overlap, and terminate those that are underperforming or no longer needed.
In general, the development of strong, successful PMOs throughout the enterprise will be an evolutionary process. In recognition of this, we have broken down our action steps into three limited-duration Quick Tasks:
#1, Roadmap for Enterprise-Level PMO Portfolio Management. The purpose of this step is to define a plan of action for an enterprise-level PMO oversight, governance, policy and process. It requires involvement of enterprise leadership and formulation of an action plan (roadmap). The roadmap becomes the core of a charter for developing and implementing enterprise-level PMO management.
#2, Enterprise-Wide PMO Identification and Review. This step inventories and analyzes the characteristics of existing (and any planned) PMOs in detail. It collects detailed input from stakeholders, PMO directors, and others. It categorizes each PMO by roles and identifies strengths, benefits, and issues. Best practices and lessons learned are identified. A comparison is made to PMO processes and current enterprise policies and processes. There will be an assessment of the feasibility of establishing an enterprise PMO portfolio. The output will be a summary report with findings and recommendations.
#3. Enterprise-Wide Strategic Plan for the PMO Portfolio. This step builds on detailed information available regarding PMOs in the enterprise, as developed in the previous step. The objective will be to develop a comprehensive strategy for the governance, policy, and processes applicable to PMOs in the enterprise. The task should be guided by a leadership team with opportunities to review and interact regarding findings. Output will be a strategic plan for enterprise oversight of PMOs, including an implementation plan.
There are many relate considerations. For example, communications and change management will be important. Establishing an enterprise-wide PMO community may help. It could be helpful to explore options for a Wiki, workshops, and facilitated reviews along the evolutionary path.
What’s New
IT is changing rapidly. Keeping PMOs aligned with these changes can be challenging. Cloud computing, mobile computing, and social media are all having an impact, as is a trend toward system consolidation. Like any other major cluster of investments, the PMO portfolio should be managed on an ongoing basis.
QT Plan
The Quick Plan needs to be tailored to each enterprise’s situation and the general characteristics of its PMOs. The P2C2 Group’s approach would be to tailor the plan of action following additional discussion. We have segmented the work into three Quick Tasks, to illustrate our general approach.
QT #1, Roadmap for Enterprise-Level PMO Portfolio Management. The purpose of this task is to define a plan of action for an enterprise-level PMO oversight and governance policy and process. Duration would be approximately 6 weeks, resulting in a roadmap, scope, and schedule for follow-up action.
- Organization of an enterprise leadership team for the task
- Summarization of available information about PMOs in the organization
- A workshop to discuss needs and opportunities, group meetings with stakeholders
- Summary of findings
- Draft roadmap and action plan
- Detailed meeting of leadership team to make decisions
- A Roadmap (Plan-of Acton Report)
- A project charter for enterprise-level PMO management.
QT #2, Enterprise-Wide PMO Identification and Review. This task is an in-depth review of the review items discussed above. Task duration would be about three months, and the objective would be to establish an accurate snapshot of PMOs in the enterprise including related problems and opportunities. The task should be guided by a leadership team with opportunities to review and interact regarding findings. Output would be a report that addresses the following information:
- Brief the enterprise leadership team about the task
- Identify all PMOs and PMO-like units in the enterprise
- Document the roles, cost, and timeframe of each
- Review current enterprise-wide accountability requirements for PMOs
- Discuss expectations of executive/business sponsors of each PMO
- Review problems and successes with a cross-section of PMO directors and programs/projects reporting to PMOs
- Assess how current organizational policy and processes impact PMOs
- On a preliminary basis, categorize PMOs by role/function or other key attributes and identify the most salient benefits
- Look at lessons learned and identify any potential “best practices”
- Assess the feasibility of establishing an Enterprise PMO Portfolio
- Prepare a draft report of findings and recommendations
- Present the findings to the enterprise leadership team
- Prepare a final report of findings and recommendations
QT #3. Enterprise-Wide Strategic Plan for the PMO Portfolio. This task builds on detailed information available regarding PMOs in the enterprise. Task duration would be three to four months, and the objective will be to develop a comprehensive strategy for the governance, policy, and processes applicable to PMOs in the enterprise. The task should be guided by a leadership team with opportunities to review and interact regarding findings. Output would be a strategic plan for enterprise oversight of PMOs, including an implementation. Preparation of the plan should consider questions such as:
- How does the plan—and PMOs—support the overall IT strategic plan?
- What is the strategy for enhancing the value and likelihood of success for the portfolio of PMOs?
- Who will provide enterprise-level governance for the portfolio?
- Should PMOs be considered projects and follow project management protocols?
- Should a PMO charter be required, and should it have approval at the enterprise level?
- Are PMO investments aligned with enterprise IT strategy and priorities?
o Could some PMOs be consolidated?
o Are there urgent priorities that need a PMO?
o Should some PMOs be terminated?
- How will PMOs embedded in other investments be treated?- Should all or most PMOs support a core of enterprise-level metrics?
- By what criteria will PMOs be reviewed for cost, benefits, and intended results?
- How will the enterprise support PMOs with training, career development, and collaboration about best practices?
Reference
PMI Community Post, PMO Survival – Can Charters Help? February 25, 2013.
Discussion of the 2011 CHAOS Study and Project Management Software, in a Girl’s Guide to Project Management (blog),
The Project Management Office (PMO): A Quest for Understanding. Brian Hobbs, PhD, MBA, PMP; and Monique Aubry, PhD, MPM. © 2010, Project Management Institute. ISBN” 978-1-933890-97-5. Book available for purchase. PMI members can get link to download for free at http://www.pmi.org/Knowledge-Center/Research-Completed-Research/The-Project-Management-Office-PMO-A-Quest-for-Understanding.aspx.
Project Smart, a U.K. perspective on PMOs.
Top 10 PMO Worst Practices: Pitfalls to Avoid. Daptive White Paper.
The Standard for Portfolio Management, Third Edition. 2013, Project Management Institute. ISBN: 978-1-935589-69-3. See 1.9 Role of the PMO for Portfolio Management.
Measures and Metrics for PMO Success, Jim Kendrick, P2C2 Group. Project Management Office Summit.
More Help
Jim Kendrick and the P2C2 Group, Inc. provide Facilitator/Coach and Subject Matter Expert services in this Quick Task area: kendrick@p2c2group.com.
Last Word
The study “confirms that the PMO is deeply embedded in its host organization, and the two coevolve.” Hobbs and Aubry, in reference cited, page 162.
