What makes a PMO successful?

Posted on: July 26th, 2012 by admin 1 Comment
The following post is by friend and colleague, Tom Carter, PMP
Frequently when meeting with organizations about starting or improving a Project Management Office (PMO) I am asked, “What makes a PMO successful?”
While there are numerous contributors to success, there are three that I believe are essential:
  1. Alignment of management expectations with the:
  • PMO reporting level and authority
  • PMO services and expected results
  • Number and skill level of the PMO staff.
  • An organizational charter communicating the PMO’s services and authority to the potential users of its services.
  • Results that demonstrate value to the business in the first:
    •  One hundred days
    • Six months

Let’s look at each of these in a little more detail.

Alignment of Management Expectations:

The importance of alignment between expectations and capabilities cannot be overstated. A one person PMO is not going to rescue all of a company’s troubled projects, align and balance its project portfolio, create and deploy a product development life cycle and train/coach/mentor the project managers. Similarly, a PMO with all junior staff will be less effective than a PMO staffed with experienced personnel. What can be accomplished is determined by both the number of staff and their capabilities. Successful implementation of a project office depends more on initial staffing than any other factor.[1] Make sure that what you are being asked to accomplish is consistent with your staff size and their abilities.

In addition to staffing levels and competence, the organizational placement of the PMO needs to be consistent with management expectations.  PMOs can report in at the company, division or department level and their services and influence are primarily determined by where they are positioned in that hierarchy. A division level PMO often has responsibility for managing the portfolio of all the projects in the division. They have the positional level of authority and peer relationships necessary to successfully execute that assignment. A PMO at the department level does not. Make sure that what you are being asked to accomplish is consistent with your placement in the organization.

Organization charter:

A project charter is an essential document for achieving consensus on the problem/opportunity, business objectives, scope and structure of a project. An organizational charter accomplishes this for a PMO. The PMO charter defines and communicates the organizational mandate for the PMO to exist. It describes the services provided, how to engage the PMO, and the PMO’s authority in areas such as reporting and standards compliance. “Organizational politics aside, the greatest challenge that most organizations face is to define what the PMO’s purpose should be, and why it is being created.” [2]

Here are a few topics that you want to make sure to address in a PMO charter:

Business Problem/Opportunity What difficulties with projects is the organization experiencing? Is there a specific opportunity that the PMO was formed to pursue?

Organizational History If starting a PMO has been tried before and failed, it is important to discuss what factors contributed to the failure and what is going to be done differently this time. Alternatively, if there are other PMOs within the company that are successful, this section can be used to discuss how lessons learned from them will be applied to this startup.

Expected Benefits What are the expectations of the PMO’s immediate management chain and the users of its services? What is the value proposition for the PMO?
Organization Who are the people on the PMO staff?  How is the PMO organized? For example:

 

One last thought; in addition to a PMO charter it is a good idea to prepare a “sales brochure” that describes the services offered by the PMO and how to contract with the PMO for service delivery. The brochure is a good focus for discussion and a good “leave-behind” when meeting with prospective users of the PMO services.
  • Metrics What can you measure to demonstrate the value of the PMO to the organization? Don’t leave this for others to decide – take the lead and propose metrics that will allow you to show how the PMO is contributing to organizational success. For example: a reduced number of or less severe cost and schedule over-runs, higher customer satisfaction, reduced attrition, finishing more projects per year, better alignment of projects with organizational strategy, increased business satisfaction.
  • Services The services you offer and how the rest of the organization can engage you for those services needs to be defined. The project office concept covers a continuum of services from providing support to project managers to managing the company portfolio of projects and being responsible for project results. There is no standard set of services provided by PMOs, services vary widely based on:
Organizational Placement
The PMO mandate
The size of the PMO staff and their skill levels
The project management maturity of the parent organization
That said, here is a list of “typical” PMO Services
  • Assist projects at start up with charter development, scope definition, estimating, scheduling, risk management, etc
  • Provide project/program management consultative expertise, coaching, mentoring and support
  • Provide a neutral, centralized office for monitoring, analyzing, and reporting on selected projects and programs
  • Maintain a repository of project management lessons learned and best practices
  • Provide project management expertise to troubled projects
  • Contract for, or develop and deliver project management training
  • Supply skilled project managers for critical projects
  • Perform – or facilitate –  enterprise project portfolio management
  • Provide standardized tools, techniques, and methodology
  • Promote project management as a core competency
Another good list of “typical” PMO services comes from the Project Management Institute. In 2007 The PMI conducted a survey of 500 PMOs. Among other things they identified 27 staff functions that were frequently part of PMO mandates. PMI organized these 27 functions into five independent groups which are listed from left to right in decreasing order of the average importance in the table below.[3]
PMO

PMO

Organizational learning

  • Report project status to upper management
  • Develop and implement a standard methodology
  • Coordinate between projects
  • Provide advice to upper management
  • Monitor and control the performance of the PMO
  • Monitor and control project performance
  • Promote project management within the organization
  • Identify, select, and prioritize new projects
  • Participate in strategic planning
  • Manage archives of project documentation
  • Implement and operate a project information system
  • Develop competency of personnel, including organizing through training
  • Manage one or more portfolios
  • Manage benefits
  • Conduct post-project reviews
  • Develop and maintain a project scoreboard
  • Provide mentoring for project managers
  • Manage one or more programs
  • Conduct networking and environmental scanning
  • Conduct project audits
  • Provide a set of tools without an effort to standardize
  • Allocate resources between projects
  • Implement and manage database of lessons learned
  • Implement and manage risk database
Results in the first one hundred days:
The first one hundred days are where the foundation for success is built. During this timeframe you must reach out to the potential users of your services letting them know who you are, what your roles/responsibilities are and how they can work with you. The primary focus in this period is to understand the organization, market your value and services, and get a few quick wins. Here is a suggested list of things to accomplish in the first one hundred days that will help build a strong foundation.  Not all of the activities listed below will apply to all PMOs and, depending on the number of staff and their experience, some may require more time.
  • Understand existing staff capabilities
  • Understand organizational politics
  • Define and document scope/expectations and develop a PMO charter (if there isn’t one already)
  • Develop a staffing plan linked to the scope/expectations
  • Develop a marketing plan for the PMO and begin execution
  • Establish a list of all “key” projects in the area(s) of the business you are responsible for
  • Resources
  • Major milestones
  • Start/end dates
  • Focus on business value, not compliance. Some low cost/high value activities are:
  • Lead lessons learned facilitations
  • Help with project initiation
  • Help with project status reporting
  • Lead project risk assessments
  • Help with estimation and schedule development
  • Provide training/consulting/mentoring
  • Provide assistance to “troubled” projects
Results in the first six months:
The first six months are crucial to survival of the PMO. Businesses that do not see benefits within that timeframe often lose interest and disband the PMO.  Here is a suggested list of things to accomplish in the first six months that will continue to add value to the foundation established in the first 100 days. Here again, not all of the activities listed below will apply to all PMOs and, depending on the number of staff and their experience, some may require more time.
  • Open PMO positions filled
  • Guidelines for project planning and estimating developed and in use
  • “Startup Services” being used for key projects
  • Project classification system defined, agreed to, and in use
  • “Commitments Committee” formed to manage the project portfolio
  • Process to review and prioritize projects defined, agreed to, and in use
  • Project metrics and format for reporting on key projects defined, agreed to, and in use
  • Project review process defined and in use on key projects
  • Cross organizational working group to review, improve and simplify the product development process defined and launched
 Summary:
It isn’t the size of the PMO or how high they report into the organization that determines whether or not they will survive; rather it is the alignment of their services, skills and reporting level with the organizations expectations and their ability to deliver in that framework that determines survival.  If the PMO can demonstrate value for the organization in the first 100 days and first 6 months, it will be on the road to long-term success
Footnotes:
[1]Richard Murphy, The Role of the Project Support Office, PM Network, May 97.
[2] From a presentation, Creating a PMO Charter, Dr. Gary Evans, CVR/IT Consulting
[3]The Multi-Project PMO: A Global Analysis of the Current State of the Practice. A white paper prepared for the Project Management Institute by Dr. Brian Hobbs, University of Quebec at Montreal, Quebec, Canada

 

One Response

  1. Valencia Paz says:

    “Successful implementation of a project office depends more on initial staffing than any other factor.” As a people-oriented PM, I agree that you should hire people equipped with skills and knowledge. And you should develop a solid relationship with them since the success of the project depends largely on them. Thank you for sharing this informative post!