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White Paper Establishing A Successful PMO 2014
White Paper Establishing A Successful PMO 2014
pmsolutions white paper series | p 800.983.0388 | pmsolutions.com | ©2014 Project Management Solutions, Inc. All rights reserved.
In 1998, Tom Peters suggested
that companies should projectize,
and he pronounced the logic of
managing by projects to be
“unstoppable.” It seems he was
right.
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Establishing a Successful PMO
3
»» Projects are not actively and realistically tracked
and managed throughout execution. Thus
Percentage of Firms
change, kill, or recover decisions are not made
with PMOs early enough.
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Establishing a Successful PMO
The PMO as Strategy Execution Office Initially, the PMO must aggressively implement a strat-
As an organizational center for the management of egy for getting top-flight project managers in place —
the project portfolio, a PMO can provide the structural hiring or contracting new project managers and, at the
support for an organization’s strategy execution pro- same time, developing promising personnel within the
cess. Corporate strategy affects the choice of organi- organization. Coordinating both the efforts and the de-
zational structures; likewise, organizational structures velopment of project managers from diverse sources
are important to the execution of corporate strategy. is a critical role for the PMO.
In our Strategy & Projects research, a number of best Project managers report to the mature PMO, which
practices for the effective execution of strategy were maintains a database of information on the organiza-
identified. These included: tion’s project managers, including their project man-
»» The company has an organizational structure agement, business, and technical skill sets, capabili-
(strategic project office, office of strategy manage- ties, specialties, and experience. New projects can be
ment, strategic steering committee, etc.) that is staffed using this information, while project managers
responsible for managing strategy execution. between full-time assignments work on special proj-
»» Project management is clearly established and ects such as developing new processes, methodolo-
embedded within the organization’s business gies, techniques, templates, and capabilities. A highly
management structure. competent project manager is too valuable to be
idle just because he or she is between projects. This
»» Information about strategy and projects flows infrastructure development aspect of the PMO allows
freely between business units facilitating strategy the organization to derive full value from a project
execution. manager’s expertise and experience as well as avoid
These strategic functions are increasingly expected of the high cost of turnover.
PMOs; so much so that Gartner analyst Audrey Apfel One of the biggest challenges in most organizations
predicted in 2011 that the future of the PMO is as the is that they have subject matter experts (technology
“Office of Strategy Execution.” gurus in IT organizations; clinical experts in pharma-
A PMO can also play a key role in another best prac- ceutical R&D organizations), but few professional
tice: making a focus on strategy execution an impor- project managers skilled in the disciplines of project
tant part of the organization’s culture. management (planning, scheduling, communicating to
uncover problems, resolving and removing problems,
reworking the project and communicating with stake-
holders to meet objectives).
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The PMO is the center of focus for project manager Planning the PMO
and team training and development. It identifies
competencies needed by high-performance project The Structure of the PMO
managers and for executive awareness and team The organizational structure of the PMO reflects the
member participation. The PMO participates (typi- organization’s complexity and needs. Understand-
cally with a specialized project management training ing what PMO structure is right for your company is
vendor) in tailoring standardized courses around the critical, since you must align your goals for the PMO
culture and methodologies that apply to the organiza- with the appropriate structure to avoid wasting time
tion specifically. by implementing PMO capabilities that are either too
advanced or too simplistic for your needs.
The development of promising project managers into
high-performance project managers is yet another For example, at the enterprise level, the PMO serves
critical step. Such professional development includes as a repository for the standards, processes, and
training, but begins with establishing a project man- methodologies that improve individual project perfor-
agement career path, identifying project manager mance in all divisions. It also serves to deconflict com-
competencies, then hiring for those competencies, petition for resources and identify common resources
creating performance metrics that reward project that could be used across the enterprise. More impor-
managers for the right behaviors. tantly, the enterprise-wide PMO allows the organiza-
tion to manage its entire collection of projects as one
The mature PMO carries a full complement of project
or more interrelated portfolios. Executive management
support staff, which provides a dual project manage-
can get the big picture of all project activity across the
ment career track within the organization, allowing
enterprise from a central source — the PMO; project
individuals to specialize in the “science” of project
priority can be judged according to a standard set of
management (scheduling, controlling, software) and
criteria, and projects can at last fulfill their promise as
free up project managers to perform the managerial
agents of enterprise strategy.
and facilitative functions.
The important thing to take away from this discussion
In our Resource Management Challenges research,
is that it is a mistake to charter an enterprise-wide
we found that, although few organizations are ma-
PMO and task it with remaking the organization, at
ture in their practice of resource management, those
the same time saddling the effort with inexperienced
companies with a fully staffed PMO performed better
people and a low level of influence in the organization.
across a range of organizational performance metrics,
Yet this common error dooms many PMOs from the
from financial performance to customer satisfaction.
beginning. Decide what your goals are and position
The roles and career progressions in such a PMO are
and staff the PMO accordingly.
fully discussed in our book, Optimizing Human Capital
with a Strategic Project Office.
Staff development and training is a key way for PMOs
to add value to the organization. This was demon-
strated by the finding, in the State of the PMO 2014,
that high-performing organizations were nearly three
times more likely to have training programs in place.
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Establishing a Successful PMO
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Assess Your Organization and Establish a PMO The State of the PMO 2014 showed that the use of
Strategy contracted resources continues to play an important
Define the PMO and determine your immediate con- part in PMO strategy (see Figure 3). PMOs from larger
cerns and long-term objectives. As appropriate, start firms, IT divisions, and high-performing organizations
with an assessment of your current capabilities, goals, are more likely to use contracted resources.
and objectives. Don’t simply assess for the benefit of
Deploy Short and Long-Term Initiatives
developing a numerical ranking, but instead to clearly
understand your project management strengths and Armed with an implementation plan that maps to an
weaknesses and map those against organizational organization’s goals, the startup of the implementa-
goals. The result of an assessment should be a clearly tion project is activated. With expectations of results
prioritized action plan that identifies the time, cost, high, it is important to plan both short and long-term
and resources required to get to the next level. PM activities — to show immediate results and to lay an
Solutions’ Project Management Maturity Model drills essential foundation for continuing success. Some
down to an actionable level of detail that can be par- examples of short-term initiatives are:
ticularly helpful in developing objective and productive »» Creating an inventory of your projects (new prod-
assessments and implementation plans. uct development, information technology, busi-
ness enhancements, etc.)
One strategic decision that may need to be ad-
dressed early on is the choice to either acquire »» Preparing an executive dashboard, showing the
outsourced project management resources — plan- status of all active projects
ners, controllers, project mentors, project manag- »» Establishing summary project report structures
ers, or even the entire PMO staff — from outside and project success metrics
the enterprise. This contract staff can be one way »» Establishing an initial communications program
to get moving quickly with experienced person-
nel and can be a long-term strategy or a transi-
tional feature of the project management initiative.
in 2014
Percentage of PMOs that Use Contracted 43% of Best-in-Class
organizations used
Resources Continues to Grow contracted resources
to manage the PMO!
70%
60%
2010 2014
50%
40%
30% 56% 59%
20%
10% 19% 19%
0%
To manage projects/programs To manage PMO operational
functions
Figure 3
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Establishing a Successful PMO
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Support and Improve Conclusion
When the PMO is in full operation, it supports the
The bottom line: You will be able to accurately predict
organization’s projects from a tactical and a strategic
and manage the time, quality, and cost of your proj-
perspective, conducting day-to-day activities, refining
ects. Some signs that projects are well under control:
project management activities, and expanding its
involvement in the operations of the organization »» Established project scope statements are agreed
where appropriate. Training and other initiatives con- on and worked in partnership with business and
tinue under the direction of the PMO. project performance groups
»» Projects are managed in an ongoing fashion, with
Key stakeholders provide feedback on the PMO’s
up-to-date and realistic time, cost, and scope
efforts, and activities are continually refined as part of
projections
a quality management program. Portfolio manage-
ment becomes more sophisticated as more project »» A decision-making process exists for addressing
metrics are collected. A lessons-learned library, and resolving project conflicts
benchmarking, best practices collection, and other »» Project schedules have accurate estimates that
knowledge management activities are hallmarks of the are not constantly revised
mature PMO.
»» Top management understands project manage-
ment basics
»» Activity-based costing systems and project man-
agement training programs are in place.
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Establishing a Successful PMO
References
Apfel, A. (2011, June 20). “What’s Hot and What’s Not: The Future of Project Management.” Presentation at the
Gartner IT Summit, San Diego, CA.
Crawford, J. K., with Cabanis-Brewin, J., & Pennypacker, J. S. (2008). Seven Steps to Strategy Execution. Haver-
town, PA: Center for Business Practices.
Crawford, J. K. and Cabanis-Brewin, J. (2005). Optimizing Human Capital with A Strategic Project Office. Boca Ra-
ton, FL: Auerbach Publications.
Crawford, J.K. (2014). Project Management Maturity Model, Third Edition. Boca Raton, FL: Auerbach Publica- tions.
Crawford, J. K., with Cabanis-Brewin, J. (2010). The Strategic Project Office: A Guide to Improving Organizational
Performance, Second Edition. Boca Raton, FL: Auerbach Publications.
Crawford, J. K., with Cabanis-Brewin, J. (2011). An Inside Look at High-Performing PMOs. Glen Mills, PA: PM Solu-
tions.
Peters, T. (1998). Quoted in “Passion Beats Planning …” Interview in PM Network. Newtown Square, PA: Project
Management Institute. September: p. 49.
PM Solutions’ Research (2009). Resource Management Challenges. Glen Mills, PA: PM Solutions.
PM Solutions’ Research (2014). The State of the PMO 2014. Glen Mills, PA: PM Solutions.
PM Solutions’ Research (2006). Troubled Projects: Project Failure or Project Recovery. Glen Mills, PA: PM Solutions.
Note: PM Solutions Research was formerly known as the Center for Business Practices.
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Establishing a Successful PMO
pmsolutions white paper series | p 800.983.0388 | pmsolutions.com | ©2014 Project Management Solutions, Inc. All rights reserved.