Delivering Successful PMOs

How to Design and Deliver the Best Project Management Office for your Business

Peter Taylor, Ray Mead

• Publisher: Routledge
• Year: 2016
• ISBN:
  9781317153276
• Edition: 1
• Topic: Business
• Subtopic: Human Resource Management
• Index: Business

Delivering Successful PMOs is intended to be the companion book to Leading Successful PMOs (Peter Taylor) which was a guide to all project based organisations providing a common language to describe the variety of possible PMOs, explaining how to do the right things, in the right way, in the right order, with the right team, and identifying what made a good PMO leader. Delivering Successful PMOs takes this to the next level and provides a clear framework to conceive, design, build, prove and embody an enterprise PMO inside an organisation, dealing with the strategic intentions, the politics, the people and the projects. The book draws on the rare experience that Ray Mead, through his organisation p3m global(www.p3m.global) had in building an enterprise PMO for a major organisation (based in the Middle East) from the ground up - a 'greenfield' enterprise PMO. Through this process he and his team have developed an invaluable methodology that is shared through this book alongside a real case study - this is not theory, this is not 'perfect' world modelling, this is proven through practice and live application. Peter and Ray extend the guidelines from the first book and weave them in to the process of delivering a PMO that works for an organisation and delivers success - measured by improved project health, greater returns on investment, a better project management community, closer connection to business strategy and a more mature project organisation.

CHAPTER 1
A Short Reflection

What is it with all the acronyms?

And why do they all start with P?

A full and frank discussion on the various different meanings and roles of the PMO can be found in Peter’s precursor to this book, Leading Successful PMOs. For those who have not yet had the good fortune to read that particular book, we’ll summarise again for you here.

As you can imagine, knowing what kind of PMO you need and want has a dramatic impact on how you deliver it, which we will be discussing further in later chapters.

‘PMO’ is an androgynous term – my understanding of a PMO is not the same as your understanding of a PMO. Nor is it the same as your boss’s understanding or your CEO’s, or your customers’, or even your PMO manager’s understanding. The truth is that there are many different types and functions of a PMO and it can be built to serve different purposes. The challenge is having those functions clearly defined and uniformly perceived in the business. When this doesn’t happen things start to unravel fairly quickly, as we will explore shortly.

On paper, PMO stands for ‘Project Management Office’. It sounds physical; you can just imagine a bustling room with people running about frantically, phones going and with Gantt charts and network diagrams plastered all over the walls. The reality is often very different. A PMO can also be ‘virtual’: it can be dispersed over several locations; in smaller organisations it can even be half of one person’s time.

Confusingly, PMO can also mean Programme Management Office or Portfolio Management Office, again depending on its function. People have sought to sometimes differentiate their PMO by calling it different things: P3O (for Portfolio, Programme and Project Office), PSO (Project Support Office), PDO (Project Delivery Office), PCO (Project Control Office), CPO (Central Project Office), CP3MO (you get the idea …).

We have yet to come across a C3PO, but if any readers know of any, the authors would be delighted to hear about it and we strongly reject the suggestion that PMO can sometimes stand for ‘Projects Mostly Over-budget’.

To save confusion, we will retain the term PMO and take that to mean an office which, depending on its maturity and the need it fulfils, can perform a multitude of different functions.

As stated in the preceding book Leading Successful PMOs:

The Project Management Office (PMO) in a business or professional enterprise is the department or group that defines and maintains the standards of the business processes, generally related to project management. The PMO strives to standardise and introduce economies of repetition in the execution of projects. The PMO is the source of documentation, guidance and metrics on the practice of project management and execution.

A good PMO will base project management principles on accepted, industry standard methodologies, as well as government regulatory requirements as applicable. Organisations around the globe are defining, borrowing and collecting best practices in process and project management and are increasingly assigning the PMO to exert overall influence and evolution of thought to continual organisational improvement.

Establishing a PMO group is not a short term strategy to lower costs. Recent surveys indicate that the longer organisations have an operating PMO group the better the results achieved to accomplish project goals. (which might lead to eventually lowering costs)

PMOs may take other functions beyond standards and methodology, and participate in Strategic Project Management either as facilitator or actively as owner of the Portfolio Management process. Tasks may include Monitoring and Reporting on active projects (following up project until completion), and reporting progress to top management for strategic decisions on what projects to continue or cancel.

That was the long explanation; in simpler, shorter terms a PMO was described as:

Doing the right things, in the right way, in the right order, with the right team.

Whilst Leading Successful PMOs explored what was meant by a PMO and what a PMO could deliver to a business that invested in a PMO or collection of PMOs, and what made the new breed of PMO leader successful, this book explores the mechanics of good delivery of a PMO, once the purpose was understood.

The framework given in this book was designed as a comprehensive method to deliver an Enterprise PMO, but it can be equally adjusted, scaled and applied to the delivery of any type of PMO. The authors will discuss the critical sizing of a PMO later on and reflect that it does matter when it comes to a PMO.

“It is in the nature of the human being to seek a justification for his actions.”

Aleksandr Solzhenitsyn

CHAPTER 2
A Further Justification

Mark A. Langley, President and CEO of the Project Management Institute stated in the PMI’s ‘Pulse of the Profession™ 2013: The High Cost of Low Performance’ that:

Failed projects waste an organisation’s money: for every US$1 billion spent on a failed project, US$135 million is lost forever … unrecoverable.

The report later went on to confirm what we all believe:

The best performing organisations approach project, program and portfolio management differently from their peers:

1. They create efficiencies to drive organisational success.

2. They focus on talent management and improving its role in project management.

3. They employ project, program and portfolio management practices strategically.

And it is the authors’ belief that the best custodian for all of this key activity is an effective and well designed, well executed and well managed PMO.

The challenge for businesses these days is pretty clear: multiple stakeholders, increasing complexity of projects and an expanding range of scope, faster time to market, more flexible strategic planning and execution all have contributed to making project management a tough task for C level executives.

Again, it is beholden of the PMO as the single point of management and execution for this increasing (in scale and complexity) project-based activity to aid the C level executives in this key area.

The good news is that, as the PMI’s Pulse of the Profession™ 2013 goes on to say:

The percentage of organisations with project management offices (PMOs), or a similar centralized project management department, is increasing. Nearly seven out of 10 organisations (69 per cent) have a PMO, up from six out of 10 (61 per cent) in 2006, when PMI first began tracking this.

Excellent growth and on a path perhaps to all organisations coming to the state of appreciation for what a PMO could do for them and their organisation (the emphasis being on the ‘could’). The report continues:

Organisations are increasingly establishing PMOs with enterprise-wide responsibilities, which are growing more rapidly than those that serve a department, region or division of the organisation. Compared to their department-specific, regional and divisional peers, enterprise-wide PMOs are more focused on strategic aspects of project management, such as training, portfolio management, establishing metrics, and developing core project management maturity. These findings suggest that as more enterprise-wide PMOs are created, more projects will be aligned with the business goals of the organisation, and project management will be executed more strategically.

Again, excellent news from PMI, and not only from PMI either, the 2012 KPMG report – Business Unusual: Managing Projects as Usual – speaks of the PMO as being an ‘enabler’:

As organisations grow and are involved in multiple projects, the key requirement is to translate the best practices across projects to bring efficiency in the way things are managed. The strategies undertaken to ensure effective execution of the project, plays a key role in project success. The role of the PMO is of great importance as it is looked upon as a key enabler within organisations to assist and build key strategies. PMO also intervenes to ensure conflicts are resolved and dealt with in a systematic manner and engage with useful project management tools such as communication, budgeting and planning which leads to a project success.

KPMG note that:

Organisations have started investing in a big way on multiple initiatives simultaneously. The increase in number of stakeholders, each with their own style of project management, has led to the increased risk of missing out on basics of project management excellence. The ‘PMO concept’ is not new to the industry. With projects in many organisations becoming global, involving multiple business units and locations, the benefits of PMO are more visible.

Almost 64 per cent of the survey respondents to this survey identified the PMO as a means to optimise on quality and on scope, time and budgetary constraints. But the report continues with a word of caution:

The benefits of the PMO are widely known, however in order to achieve the expected benefits, PMO needs to be implemented with defined processes, tools and governance mechanism. Having an effective PMO can help in bringing efficiency to the overall project management. Learning from past projects can be identified, documented and used to the benefit of future projects by the PMO. Also allowing a dedicated team to monitor the project heath at periodic intervals can help the project team to focus on project execution.

But it does seem, cautionary note aside, that the PMO can have a positive impact on project maturity inside and organisation and in delivering greater project success. And KPMG further state that:

The progressive development of the organisation’s project management approach, methodology, strategy and decision-making process are dependent on having a dedicated entity for project management.

And concludes with this:

It is observed from our study that organisations having a project management office are at a considerable advantage as the PMO plays a positive role and impacts the project management maturity.

But it is not just any PMO that delivers to a business at this level; the move towards Enterprise PMOs as we saw from PMI’s Pulse of the Profession™ 2013 is significant.

PWC in their report ‘Insights and Trends: Current Portfolio, Programme, and Project Management Practices’ declare that ‘Increasingly, successful organisations employ PM to drive change and achieve their business objectives’ and more to the ‘PMO’ point ‘Established project management offices result in projects with higher quality and business benefits’.

PWC continues with this insight:

With the exception of the smallest scale portfolios, the portfolio performance levels of respondents whose [Portfolio Management] programs are managed by an Enterprise PMO are consistently higher than those whose portfolios are managed by other groups or individuals, resulting in an increased likelihood of portfolios that meet schedule, scope, quality, budget, and business benefits requirements.

PWC actually declare that a PMO being established is one of the key criteria to an organisation achieving Level 4 maturity on their PM maturity model (you can read lot more about such maturity models in the appendices).

So ‘all in all’ this is good news for the ‘PMO’ world and the potential of this relatively new business unit.

It seems that most agree that a well-designed and well established PMO can deliver projects at a higher quality level and more attuned to the real and current business benefits.

Which brings us neatly to ‘delivering’ such a ‘successful PMO’.

“Whatever needs to be maintained through force is doomed.”

Henry Miller

CHAPTER 3
Destined to Fail? …

Whisper it in hushed tones, but the PMO may already be an endangered species.

The sheer scale of PMO implementation in the last 5 years has invariably led to numerous botched attempts to deliver them. The authors themselves know of several organisations who have abandoned the idea of implementing their PMO or have even dismantled a PMO that had been running for several years.

The ESI report from 2015, The Global State of the PMO, identified that some 72 per cent of respondents reported that the value of their PMO was questioned in some way by key stakeholders and inevitably some of these ‘questions’ were translated in to ‘cancellation’ of the PMO.

In each case there is one central theme: the PMO failed to deliver and/or failed to demonstrate value.

Part of the issue here is that it is generally accepted that the idea of a PMO as a good thing is on the ‘up’, that is to say it is becoming increasingly common for PMOs to exist inside organisations – the State of the PMO 2014 (PM Solutions) identifies an increase from 48 per cent in 2000 to 80 per cent (90 per cent in large firms), having PMOs in place, and notes ‘Growth in the number of PMOs reflects their rising importance to companies’.

So it would seem that a bright shiny new PMO could be on the shopping list for a lot of executives but this ‘rush’ to secure their very own PMO is causing some of the issues and failures as there is insufficient knowledge and experience in the marketplace to support all of these PMO initiatives.

The PMO, in the wrong hands, quickly develops a bit of an image problem. Project managers end up seeing it as the ‘project police’ enforcing the use of standards, forms and templates that add little value to the projects that they are working on. It becomes all too unbalanced, too much about process and not enough about people and certainly not about value. In these cases the PMO may enforce the use of tools which replicate information already recorded into other tools; it may slow down...