In the dynamic business environment today, project management is not just about execution anymore. Organizations are looking to reduce costs, optimize processes, improve productivity, and strengthen the bottom line. When dealing with multiple projects of diverse nature, organizations often tend to lose the plot. This has led companies to turn to Project Management Offices (PMOs) as a way to boost efficiency, reduce costs, and enhance project delivery metrics. The PMO oversees and manages the entire spectrum of projects and provides support in terms of people, processes, tools and timely interventions, to ensure projects are heading in the right direction. This drives high standards project management rigor through process excellence, resource management, customer experience and technology adoption.
We will be talking in detail about the how the PMO can add value to project management initiatives. Part 1 of the blog series will focus on the steps to set up a world class PMO and PMO responsibilities. Part 2 will cover aspects that can make the PMO effective and how can keep adding incremental value.
Setting up a world class PMO
Secure Management Support & Sponsorship
Creating a new organization that is responsible for the performance of other organizations is not the easiest move. Such moves are often met with a lot of resistance and non-cooperative behavior. Executive and management buy-in is crucial to get such initiatives off the ground because leaders have the authority and mandate to drive organizational change management in areas that have the direct impact on company performance. A strong business case with a detailed roadmap and justifications in the form of cost-benefit analysis and ROI is crucial for getting management approval. It is not uncommon for companies to seek external consulting advice for getting such initiatives implemented.
Setting up a strong governance model
The centralized nature of PMO brings focus and rigor to project governance. PMOs also are uniquely placed to have a holistic view of the project with a specific focus on performance, standardization, measurement, and optimization. Since they are not caught up in the day to day execution, they are tasked to create and run a clear charter for the company. Let’s look at the areas of expertise a PMO brings to a company
- Project Portfolio Management
This is crucial for large enterprises managing the diverse set of projects. The ability to manage this centrally with dedicated focus gives project success a shot in the arm
- Streamlined Project Communications
Communication is always a concern area in project management. PMOs can bring sophistication, transparency, and diligence in communicating vision, progress, risk factors and project health across teams, stakeholders and customers
- Excellence in Process & Quality
PMOs can make informed decisions about setting up and optimizing processes and practices to achieve desired efficiency and quality levels. They can also have a direct contribution to organizational objectives such as productivity and profitability.
- Performance Management
As a governance body, PMO owns the project performance metrics for the organization. They are responsible for setting up the measurement systems, conducting specific data analysis and reporting. This also helps build a data-driven and performance-oriented work culture.
- Business outcome focus
PMOs are empowered to keep a tight grip on project financials and ROI by defining metrics and conducting the necessary analysis to ensure compliance
- Infrastructure & Vendor management
PMOs play a major role in technology selection, implementation, and adoption. This helps them drive automation, resource management, and other productivity initiatives centrally. They are also responsible for managing specific third-party vendor relationships.
- Standardization & Knowledge Management
The biggest and most important aspect of PMO’s existence is the need to bring standardization to the project management discipline. They are required to study and implement best practices in the various spheres of project management, be it planning, resource management, reporting or collaboration. PMO also owns documentation and knowledge management.
Setting up frameworks, processes and best practices
This is where the execution aspect comes into the picture. This is also the most complex step in the process as it needs a thorough understanding of people, process, tools, and culture (Read: Project Management = People + tools + culture) to make any real impact. It could get complicated further if the PMO is being set up after the project is already underway. A common problem with setting standards is that those setting standards get too absorbed by global standards and industry best practices without testing the feasibility with the specific business needs or nuances of their organization. The solution lies in not going to either extreme but to find the ideal balance, one that will adapt to the organizational environment and ensure success, without compromising on standardization or mandatory regulations. The PMO needs to work closely with HR, Finance, Quality, Learning & Development and IT departments to drive key initiatives around, training, compliance, technology enablement & adoption and ROI targets.
Gearing up for a PMO culture
The success of a PMO depends on its ability to deliver on its purpose. It is an organization created to bring control on every aspect of the project every step of the way. That gives you an idea of how tough it can actually be for a PMO to do its job every day. Taking this charter from what’s written on paper to actually making it happen is huge cultural exercise. Change management, therefore, becomes a crucial starting point for PMOs. They need to build a high-performance culture that is inclusive, not dictatorial, process-oriented yet innovation-friendly and outcome focused.
In Conclusion, like any other central organization, the PMO has its pros and cons. For the PMO to be successful and make the consistent impact it is important that they just don’t look good on paper but also deliver on the objectives they signed up for. PMOs can add tremendous value to the project management discipline by adopting a “feet on the street” approach, being data-driven and focusing on better business outcomes.
In Part 2 of the PMO topic, we will discuss how PMOs can be more successful in today’s business context.
Do share your views on PMO effectiveness.