Getting the Most Out of Your Project Management Office (PMO)

Written By: Todd Warner, Director of Consulting Services and Bruce Halley, Director of Consulting Services, Navigator Management Partners

Is your enterprise considering implementing a Project Management Office (PMO), or do you already have one but are not satisfied with the results? According to a recent study by Gartner, over 50% of PMOs fail within 3 years. This is an extremely high failure rate for such a strategic organizational investment.  We believe this failure rate is the result of enterprises failing to clearly define the problem they are trying to solve before embarking on the journey to implement a PMO. Understanding what a PMO is and how it can be used is key to realizing business value from this tool. 

When looking at implementing or retooling your PMO, it is important to identify what challenges you are trying to solve first. There are four main areas in which a PMO can assist an organization. Understanding which of these are most important to your organization should drive how you setup your PMO:
  1. Standardize Project and Program Processes
  2. Improve Financial Management of Projects
  3. Improve Governance and Reporting of Projects
  4. Improved Resource Management

Let's review the benefits of each of these...

Standardize Project and Program Processes
Standardizing project and program related tasks and activities into a set of consistent, repeatable, highly efficient processes allows the enterprise to implement best practices across the organization, and provides flexibility for the organization to deploy its project teams on the most important projects.  This approach also ensures a common approach to status tracking and reporting, enabling leadership to be able to see the overall status of their organization’s activities. 
Improve Financial Management of Projects
Having consistent financial management processes across your projects gives the business the ability to develop a prioritized project portfolio that is aligned with the overall enterprise objectives, and then to monitor the financial health of this portfolio. It also supports the need to make portfolio level decisions, such as shifting funding or other resources to respond to unexpected opportunities or issues. A PMO is often the best way to manage the financial planning and reporting information across the organizations project portfolio. 

Improve Governance and Reporting of Projects
Applying a governance structure to support project decision making and reporting out of progress provides business leaders the transparency and empowerment to remain engaged with cross functional efforts. As projects become more complicated and recognize more business dependencies, it is critical that a process engages the stakeholders at the right time with the right information. Using a PMO to structure this governance and reporting out can make all the difference.   

Improved Resource Management
A key focus of the project management discipline is managing project resources. PMOs can greatly improve this process by helping organizations have a better picture of the resources they have available, and manage the processes to ensure that they are being used on the right work at the right time. It can also show where excess capacity or staffing shortages will exist.  Having a clear picture of an organization’s supply and demand for various resources allow for a more focused conversation on what they should be working on. 

In summary, there are a number of reasons why an enterprise should implement a PMO and no two PMOs are alike. Each organization needs to identify the right type of PMO to meet their needs and establish it to focus on these objectives to ensure it is delivering value. As the business changes and evolves, so too should your PMO. What you were tasked with addressing initially should change over time and your PMO should evolve as well. 

Engage Navigator to help you implement or retool your PMO.