An effective IT PMO can deliver breakthrough results in most PM areas including increased throughput, speed & reliability, significant reduction in resource burn-out, higher productivity, leading to high benefit/ cost ratios for IT investments.

Current research indicates that more than 50% of PMOs close down as quickly as they are initiated.

They fail to deliver the expected value and are seen as an unnecessary cost overhead by organizations, especially in today’s challenging business and economic environment. In several IT organizations, my direct experience has been that the CIO is getting increasing caught in a tight balancing act between operational and strategic responsibilities. Conflicts arise out of a dual focus on administrative and informational oversight of project investment and performance, and on justifying the PMO investments and the time it takes to deliver value. The question I find each CIO really asking is – how do I get my PMO to create significant and demonstrable business value, and fast?

There is considerable discussion today about what building an effective PMO is about – managing projects, programs or portfolios? (Download a White Paper on this subject). A general thread I see running through IT organizations that have been effective in achieving great results in this area is that their PMOs are invariably focused on Portfolio Management.

While designing PM performance metrics and dashboards is important, I believe that a focus on Portfolio Management drives home the need to understand the decision-making mechanism, which helps in creating governance and assurance processes, backed by relevant and timely information. This critically ensures that IT is directly aligned to business objectives.

An effective IT PMO can deliver breakthrough results in most PM areas including increased throughput, speed & reliability, significant reduction in resource burn-out, higher productivity, leading to high benefit/ cost ratios for IT investments.

In one ongoing engagement, where i2m operates as a PMO Managed Services Provider for a large financial services organization, we have been able to support the IT team, to achieve near 100% improvement in project throughput, speed, visibility and reliability, a 5-fold increase in number of projects completing in time, an increase in objective project selection to 75%, and an IT cost to benefit ratio of 1:20. (See related Case Video and or download the Case Study).

We invite CIOs, Project Managers and others working in this area, to share similar or differing experiences.

The common paradox most PMOs face is that instead of being looked upon as enterprises that set standards and lead company vision, they end up being used as a library of rulebooks and procedures. And while companies might be clear about the regulatory role their PMOs may play in terms of defining ‘best practices’, they are seldom clear about the influence and direction that that the office is supposed to exert on projects to ensure continual organizational improvement.

To help sidetrack this inevitable dilemma, we have put together a list of dos and don’ts which we hope you will find useful whether you’re building or growing your own PMO

Do’s

•    Build authority with trust: If you are in charge of building a package of standards for the organization, make sure you pay attention to the way business is being done. Interview subordinates who implement processes to understand their need for process, order and regularity. Don’t go in stomping rules and guidelines arbitrarily.

•    Keep it practical:  start your project building exercises with basic practical stuff like charters, action items and issue lists. Be friendly, helpful and sensitive to emerging project needs. It’s the best way to influence growth and advancement within the organization.

•    Share responsibility: When stakeholders may agree that tools and processes are not responsible for project failure, make sure the project manager does not get all the blame. Instead PMOs must proactively address the causes of failure by holding post-project reviews to learn what went right or wrong. While submitting project assessment reports, take care to include methodology, relevant PMO documents for reference along with examples of well-done work in the past.

•    Grow talent: Organizations that value performance know that learning and development is essential to business growth. It is up to PMOs to seek training providers and communicate the importance of alignment of their programs with business objectives. Providing initiatives and rewards for achievements is the best way to provide a career path for advancement to talented project managers.

Don’ts

•    Don’t lose focus: By failing to see the forest for the trees, organizations often fail to streamline their project portfolios thus banking on short-term low gain endeavors. PMOs must provide an integrated viewpoint to the company about its projects. While delegating projects to project managers, PMOs must remember to discern the urgent from the important.

•    Avoid process overload: While structured repeatable processes are important for project success, PMOs must sensitive to signs of bureaucracy signaling costly overheads experienced by those executing the project. It is essential that processes be streamlined in order to be really effective.

•    Don’t Presume: Program managers who are in charge of implementing policies assume that all projects operate on an equal state of consciousness about processes. To avoid potential conflicts between organizational and project culture, PMOs must help popularize standards by having program managers make presentations and organize workshops that demonstrate value. Processes can also be made accessible for all over the company’s intranet, where a select list of glossaries and examples can help demystify some obscure terms and methodologies.

•    Don’t be afraid of leading: In times of crisis, projects often resist a restructuring of their environments. This is an example of a situation where the PMO needs to take tough, unpopular decisions. PMOs need to be involved in critical decision making because most of the time, the authority simply does not exist at the level of the project manager.

We would like to hear more from project managers out there who have a favorite PMO solution or experience to share.

The endeavor is to enunciate why an organization in India should considering outsourcing its PMO activities and the pros and cons of doing the same.

The principal driver for outsourcing any work and/or department in most organizations is to drive down costs. However, in the case of the PMO the need for outsourcing is more strategic for:

• Mitigating Conflict of Interest
• JIT Project Management & Managing Standards
• Client Focus & Proficiency
• The Outsourced PMO models

When an organization wishes to build a PMO, it has to be seen as any other Project that the organization takes up – it needs to go through the following CDEF steps – Conceptualize, Develop, Execute and Finish. Again, like any other project there needs to be a clear authorization on building the PMO and the method that will be followed to build it. Without an authorization AND the method, the PMO runs the risk of running aground before taking off.

No organizational head honcho wakes up one morning and decides that “I think we should build a PMO” – usually there is some form of trigger which necessitates building one. The trigger itself could be positive or negative – it could well be that the delay of multiple projects are affecting the bottom line (negative) or that the sheer scale of projects coming in – internally or through clients is overwhelming (positive). Ideally, the need of a PMO should become clear when a firm is restructuring itself or leading a change effort of some sort. In any of these circumstances the key question which needs to be answered is – “Why do we need a PMO?”

This is because the roles and responsibilities accorded to a PMO vary from organization to organization – answering this question would give the organization a clear picture of what these roles and responsibilities should be – so that the energies of the PMO are channeled toward critical areas. This would help enable choosing the right model for the PMO.

References

1. http://en.wikipedia.org/wiki/Just_In_Time_(business)
2. The Value Proposition of Outsourcing PMO Activities with a Project Driven Organization – XOOMWORKS – Laurence Nicholson
3. The ideal project management model is a balancing act – Ted Stephens, Tech Republic