How good is your PMO?
By Elizabeth Harrin

A new study has shown that nearly half of Project, Programme and Portfolio Management Offices (PMOs) rate themselves as Fair or Poor in terms of effectiveness. I think that’s terrible, especially as it was the PMO team or those close to them who responded to the survey. As the purpose of having a PMO is to make an organisation more effective there can’t be much job satisfaction for those people.

The study identifies the main objective of a PMO as:

to provide a group dedicated to supporting and integrating operations across organizational boundaries. This is accomplished by providing services that either mitigate or directly address the root cause of the challenges being faced.

The main challenge identified in the study is the perennial problem of departmental silos. This is less of an issue if your PMO just serves one department (and only 26% of them claim to be enterprise-wide). However, say your PMO is one of the 36% just supporting IT. How many projects does IT do that only impact IT? The PMO will still need to work with internal customers to gather data for reports and dashboards – reporting and dashboards being one of the biggest things that PMOs do.

Churning out good reports is not one of the things that makes a PMO effective. The factors highlighted in the research that correlated with being an effective PMO were:

• Having a high level of process maturity.
• Reporting to C-level executives, with teams reporting to the CEO being the most effective.
• Having between four and six dedicated staff, although further analysis shows that more staff equals more effectiveness. The researchers don’t correlate this with staff numbers though. The highly effective PMOs from the study have over 15 staff but if their organisation is only made up of 20 people you would not be able to say this was an effective team in business terms.
• Being around a long time. The most effective PMOs have been in existence over four years, and the survey participants said that the PMO started to be properly effective after three years. That’s a long time to wait for business benefit. I don’t think that they meant that for the first two years the PMO team are pointless, but it does take a while to bed in the new way of working that a PMO brings.

It’s difficult to influence many of these. If you are a project manager working for a PMO you won’t be able to change your line management structure. If you report into a business unit VP you are doomed to be an ineffective team forever more. You can’t change how long the PMO has existed, you just have to sit it out until three years have passed and people can no longer imagine how they ever got by without you. Having said that, there are some things you can do in the meantime to bump up your effectiveness levels.

Terry Doerscher, Chief Process Architect for Planview who commissioned the study, has the following recommendations:

1. Benchmark your PMO: compare it to others in your sector. This is a huge task if you want to do it properly and assess the maturity levels of business processes and work out where the biggest operational challenges are.
2. Assess the performance of your PMO: again, a big undertaking as it means working out where processes are performing poorly and putting that right.
3. Make sure everyone knows what the PMO is: Doerscher recommends ensuring that the PMO has objectives and that its role within the organisation is clearly defined – and communicated.
4. Ensure the PMO can meet those objectives: you need a large enough team to be able to deliver everything you set out to achieve.
5. Get your PMO executive sponsorship: you can do this even without changing reporting lines, if you can find an exec who believes in the PMO concept. If you do a great job for him or her they will spread the word among their colleagues. Guerrilla PMO!
6. And finally, don’t get bogged down in day-to-day admin. Instead spend time doing fabulous work on business strategy.

Unfortunately, these kinds of initiatives are likely the be among the first to suffer in the current economic climate. I think PMOs do add value, but these recommendations all appear to be navel gazing in a time where more focus is on delivering results with less than on benchmarking support functions. I’m not saying that you shouldn’t do this, but not everyone thinks like me and this year I think PMO-improvement projects are going to be a casualty of the credit crunch.

Nice study, shame about the operational realities, but if you can fit in supporting the development of your PMO around delivering what the business is shouting for, then all credit to you.

Elizabeth Harrin, BA, MA, MBCS, is the author of the book "Project Management in the Real World", writes the irreverent blog A Girl's Guide to Project Management, and is a columnist for pmtips.net. (This article was previously published on her blog.) See Elizabeth's complete bio on the Meet the Experts page.

Filed under Project Management Organization