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Tuesday, June 26, 2007

The Value of a PMO

It takes courage for your organization's senior management to step up and support the concept of a professional Project Management Office (PMO). While forming a PMO shouldn't be taken lightly, the benefits are clearly documented.

According to Gartner Industry Research, "building a Project Management Office (PMO) is a timely competitive tactic". They believe 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". Gartner goes on to say that three basic types of PMOs have emerged.

Per Gartner, "at each end of the PMO spectrum are offices that on the one hand range from a repository, which collects and disseminates project management best practices and methodologies, to an internal consultancy model or enterprise project office, which directly provides project managers to run individual projects". "Between these two ends of the spectrum are variants of a coaching model". "These types of project offices provide expertise and oversight for the business (sometimes providing the Project Managers), in addition to advising on project setup, reporting (for example, via dashboard’ reports), and facilitating post-project reviews and metrics collection".

What Value can a PMO Offer?

Establish and deploy a common set of project management process and templates. These reusable components save time by allowing projects to start-up more quickly and with less effort.

The PMO builds and maintains the PM methodology and updates it to account for improvements and newly discovered best practices.

The PMO facilitates improved project team communication by having common processes, deliverables, and terminology.

The PMO sets up and supports a common repository so that prior project management deliverables can be candidates for reuse by similar projects. This helps to save start-up time.

The PMO is responsible for PM training. This training helps to build core PM competencies and a common set of experiences. This PMO training helps to reduce overall training costs paid to outside vendors.

The PMO coaches project managers to help keep projects from getting into trouble. At risk projects can be assisted by the PMO to mitigate further issues and risks.

The PMO serves as a tracking mechanism for basic project status information and provides a common project visibility report to management.

The PMO tracks organization-wide metrics on the state of project management, projects delivery, and the value being provided to the business by project management in general, and the PMO specifically.

The PMO is the overall PM advocate to the organization. This could include educating and selling management on the value of using consistent PM processes, or as a liaison to other business centers to provide project management training and support.

One fact is clear from the research I have conducted, a PMO is critical when it comes to supporting sound project management practices. The larger the project the more project management (PM) can help to bring about success. It is readily accepted that good Project Management processes support:

* Reduced Cycle Time and Delivery Costs
* Improved quality of project deliverables
* Early identification of project issues, budget, scope and risks
* Reuse of knowledge and the ability to leverage that knowledge on future projects
* Improved accuracy of project estimates
* Improved perceptions of the project management organization by our partners
* Improved people and resource management
* Reduced time to get up to speed on new projects

Questions or comments? Post directly on this blog, or e-mail me at sfseay(at)yahoo.com

4 comments:

Rob said...

Interesting article Stephen. It's amazing how a good PMO will really increase project success. Too few people realise it though.

I wrote an article about it at my: IT Management Life Blog

Rob

Carol G. said...

Thanks for strengthening my resolve in the value of establishing a PMO. I hope you don't mind but you inspired my morning blog (I linked to your post). Feel free to take a look http://firehorsethoughts.blogspot.com/

I look foward to reading more from you!

Tamara said...

Hi Stephen,

This is really interesting! Could you please, share the link from Gartner Industry Research results? I tried to find it but not successful..

Thanks!

Nathaniel @ project manager training said...

PMO is great! It helps quite a lot in the Project Management field.

It will help make Project Management more productive. Thanks a lot for the post!