A lot of technology and application specialists who used to spearhead management of IT projects from beginning to end see project managers as competition. This becomes a source of disempowerment – the single biggest hurdle, in terms of organizational transformation in IT – when IT leaders start to introduce a Project Management Office (PMO) group. My point of view is completely the opposite. If there are enough project management resources, I would rather have PMO support all my projects. Here are the top three reasons why IT needs a PMO group:
Bring More Bang for Your Buck
A number of IT professionals are seeing increased budget and head-count reductions as more large business decision-makers turn to cost-cutting measures. Because of this, projects are watched very intimately by IT leaders – reining in projects more closely than ever. This challenge has lead IT to turn to project management offices (PMOs) as an approach to boost IT efficiency, optimize cost, and deliver projects on time and in full. We have to bear in mind, however, that establishing a PMO team is not a short term strategy for lowering costs. Numerous studies have indicated that the longer companies have been operating PMO, the better the results in terms of accomplishing project goals.
Standardize Project Management Practices
For large corporations, scores of projects happen at the same time and more often, it is just too hard for the CIO to keep track of them. This is where PMO provides its biggest contribution to IT. PMO introduces economies of repetition in the execution of projects and makes it easier for the CIO to track progress and results. It is the job of the project management office to make sure that the projects follow the established project management standards. The PMO group is responsible for defining and maintaining the standards of processes related to project management. It is the source of documentation, guidance and metrics on the practice of project management and execution.
Facilitate IT Portfolio Management
The implementation of a PMO group is a stepping stone to IT portfolio management. I have reiterated this several times but I think it is important to note that progression from project management to portfolio management is intertwined with the maturity of the IT organization. If the organization doesn’t have a strong project management discipline and Project Management Office, it is difficult to even imagine how IT portfolio management can be achieved. PMO should have a staff of program managers who can manage multiple projects that are related – such as infrastructure technologies, desktop applications, processes, business model implementation and so on – and allocate investments and resources accordingly. IT Portfolio Management is focused on investments and business results as compared to the focal point of Project Management which is project deliverables. This will bring IT (and the business) double bang for its buck!
Someone who has experienced working with an effective project management office surely can give more than measly three reasons – but to me the three that I have just mentioned are the most essential. There is no uniform recipe to success when establishing a Project Management Office (PMO). PMO is not a quick-fix solution only created to deliver immediate savings. It is an important component of the organizational maturity of an IT organization. It is important that the PMO structure is closely aligned to the team’s culture. A final note: Projects exist in virtually all areas of the company – the PMO practice can also be implemented there. In some companies, IT’s project management office provides support and internal consulting to other departments.
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11 thoughts on “Three Reasons Why You Need a Project Management Office (PMO)”
Good article. My experience of the value of PMOs (whether they consist of part of an FTE or a team of people) is to a) initially get control (what projects are out there?), then b) deliver/execute (are we on time, budget, scope, etc.) and finally c) realize the business benefits (have we achieved what we set out to do from a business perspective?). This, as you rightly point out, is related to organizational maturity.
I have implemented this approach in several organizations over the last ten years and found that the biggest obstacle to item a) above is in the IT department, the challenge with item b) lies mostly in getting the business to engage (oh and BTW IT is part of the business), and finally with c) it is getting the PMO to move beyond being a process & documentation factory and start tracking a portfolio of benefits.
PMO are seen as a threat by a Project Manager in two cases when:
– the PMO is ineffective
– when the Project Manager is ineffective.
The resolution is very simple, ensure both are effective and they will then work together and support each other as one team against the challenges of the Project and Programmes that need to be delivered.
I see a PMO justified as a consequence of the size and complexity of the IT Organization. Then, following the ideas of a Shared Services Organization, a PMO looks like a kind of SSO that provides expecialized services related to the management of a Project or a Project Portfolio.
However, what are really the actual services that a PMO should provide to their internal customers?. I think that this is the key.
From your point of view, what are those services so that the CIO, the Project members and any other IT staff may see a value on a PMO in their organization?
You are right, what we know for sure are the advantages and the value of PMO in bigger and more complex IT groups- with the sheer quantity and size of projects IT manages.
Your first question is interesting…and I think you’ve answered that question yourself by mentioning Shared Services.
It is the IT group, within the organizations of many companies, that has most utilized and developed the PMO practice. In more mature IT groups, IT PMO is the CIO’s right hand not only in managing and monitoring IT projects but more importantly IT portfolio management.
(I don’t want to even attempt to define portfolio management, here is one that from Vaughan Merlyn, an IT management Consultant)
According to Vaughan Merlyn, IT Portfolio Management is at the heart and soul of leveraging IT for business value, and yet most IT organizations do a poor job of managing IT investments as a portfolio. At its best, IT Portfolio Management (PfM) is a way to:
1. Define your investment strategy for IT – including needs for risk/return, innovation, common enterprise-wide capability.
2. Make that strategy visible and understandable to business executives to allow dialog and debate to reach agreement with key business stakeholders.
3. Monitor performance of the IT portfolio.
4. Adjust the portfolio based upon actual performance of IT investments.
5. Adjust the portfolio based upon changing business conditions.
That’s pretty good advantages to leverage don’t you think? both for IT and the business. I am sure mature IT PMO with these capabilities can offer portfolio management along with basic project management practices and support to its internal customer. I think the perfect partner for IT in this (to provide Project and Portfolio Management Services to the business and internal customer) is company’s Strategic Planning Group.
Nice article, Glenn. I really enjoyed reading it.
Hi Steve, appreciate it, coming from you…you are the PMO expert. I am sure you have a lot to share about the significance of the role of PMO to an organization. You are welcome to share your thoughts.
For those of you who have experienced working with an effective project management office in your respective companies surely you can give more reasons why IT / (your department) needs a project management office. I encourage you to share us your thoughts and experiences. Thanks!