How to measure PMO value
While one of the key warning signs that a project management office (PMO) is set for failure is that it doesn't deliver value to the organisation, defining just what that value is and then measuring it can be something of a moving target.
That's according to Norwin Lederer, an independent strategy consultant with extensive, hands-on experience in the field of project management. Speaking at the latest quarterly Gauteng PMO Forum workshop in Johannesburg last week, he told delegates that value is `in the eye of the beholder'.
The PMO Forum is an interest group that falls under the umbrella of Project Management South Africa (PMSA). Sponsored by Project Portfolio Office (PPO), it provides an opportunity for PMO executives and leaders to network with peers across industries, and share knowledge and experience.
Lederer pointed out that the greatest dilemma of the PMO, and organisations generally, was that while billions are spent annually on project delivery, the rate of project success was notoriously low.
"The question that needs to be asked is whether the success or failure of the projects necessarily represents the success or failure of the PMO," he said.
"The common assumption is that the deployment of a PMO is the panacea to all project ills. That assumption is false. However, PMOs can make a difference, but only with executive support, nurturing, and consistently striving for higher degrees of maturity.
"The challenge is this: how do you prove the value of the PMO while on this journey, and how do we obtain and maintain the requisite executive support? And then, how do you and your PMO prove and calculate your value?"
One of the most difficult issues was to define `value' because what represented value to one individual was unlikely to be similarly defined by all others.
Lederer used a car analogy to illustrate this point: people choose to drive different types of cars based on the value they perceive each car delivers. For some, that value may lie in the luxury of the vehicle, or the perceived status it confers; for others, the value lies in its ability to get the owner from one point to another as cheaply as possible.
"Value is an individual interpretation of an expectation. It's complex and is open to interpretation. It represents the relationship between cost and quality, but it is not about quality at any price, but what each individual, or organisation, feels is worth the price being paid. Value is not value at any price, but what you feel is worth that price.
"Effectively, when it comes to PMOs, value is defined by the consumer of the PMOs services or results, or by the payer of the PMO. This means that there is no one-size-fits-all definition of PMO value: it's unique to each organisation and the context in which that value is being delivered," he said.
"In order to deliver value to the organisation, and, more importantly, to be regarded as delivering value, the PMO needs to establish the case for its existence. To do this, it has to understand what the organisation's stakeholders' expectations of the PMO are and to deliver to those expectations."