the value of a pmo and how to measure it
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Definition of a PMO
How can a PMO add value?
How to measure the value of a PMO
PMO = Project Management Office or Program Management Office
According to the PMBoK, a PMO is “An organizational body or entity assigned various responsibilities related to the centralized and coordinated management of those projects under its domain. The responsibilities of the PMO can range from providing project management support functions to actually being responsible for the direct management of a project.”
PRINCE2 describes a PMO as “A vital component in the delivery of change; whether change to public or customer services, or change within an organization”.
Traditionally,
PMOs are central bodies, acting in line management structures to govern Project
Managers and report to decision makers
PMOs govern and coordinate multiple projects by standardizing the processes
involved in the execution of projects across the organization and through status
reporting, review and monitoring.
PMOs also act in the capacity of mentors or centres of best practice, as a project
director may mentor project managers through a project. Their functional
purpose is frequently to improve project management capabilities within an
organization.
The traditional view of A Project Management Office (PMO) primarily involves
administrative functions.
The modern PMO provides standardization as the foundation, but has evolved to offer more value to its sponsoring organization.
The modern PMO is responsible for:
Benefits tracking;
Expert work planning, estimating & scheduling;
Co-ordinated resource management;
Structured progress tracking/forecasting;
Robust scope management/change control;
A focus on budget efficiency;
Stakeholder/Communication oversight;
Industrialized quality management;
Value-adding risk/issue management;
Comprehensive knowledge/records management; and
Fully-integrated project processes.
This modern PMO enables timely delivery, successfully achieved scope/quality requirements and targeted budgeting which ultimately results in the minimisation of delivery risk.
Typically, a PMO offers the promise for
Improved Project Success rate
Governance and Strategic Alignment
According to Gartner, world-class organizations enjoy a project success rate close to 90 percent.
What is it that allows these organizations to deliver business value at nearly triple the standard industry success rate?
The answer: Almost all of them have established successful PMOs.
Nearly 70% of organizationsimplementing PMOs report thatproject success rates haveimproved significantly as a result.
Met Expectations,
90%
Did not meet expectations,
10%
Project Success Rates – All Projects * Project Success Rates – World Class Organizations with PMO
*Source: Gartner 2010 Survey
Met Expectations,
25%
Did not meet Expectations,
75%
Identifying, selecting and prioritizing new projects, including involvement in benefits tracking and management.
Allocating resources between projects and programmes
Providing advice and recommendations to senior management
Conducting project health checks and post-project reviews
Monitoring and reviewing PMO performance and its effect on project delivery
A PMO Provides the leadership, organizational structure, regulations, standards and processes that ensure projects comply with best practices in accordance with the enterprise mission, strategies, and business objectives.
A PMO must provide quantifiable and measurable value to its organization or else, it is likely to be cut or eliminated.
A fit – for – use PMO Scorecard is effective for identifying and measuring the success of a PMO.
Validate the current organizational goals and strategies
Create PMO goals and strategies (optional)
Determine what it means to be successful
Assign potential metrics for each success criteria
Prioritize/select a candidate list of metrics
Validate you have a holistic, balanced set of metrics
Set targets for each metric
Add details for collecting the metrics
Add details for reporting and analyzing the metrics
Determine the meaning of the scorecard results
*Source: Gartner 2010 Survey
According to research*, "building a Project Management Office (PMO) is a timely competitive tactic". It is believed that
"organizations, who establish standards for project management, including a PMO with suitable governance, will experience half the
major project cost overruns, delays, and cancellations of those that fail to do so".
PMOs are strategic solutions to organizations project challenges and it drives real value for implementing organizations irrespective of size and industry.
The PMO strives to standardize and introduce repeatable project
delivery process and can be a source for documentation, guidance, and metrics on the practice of project
management and execution.
