A project management office (PMO) must deliver value for the organisation, or face the danger of being slashed, as companies are under increasing economic pressure, says PM Sight director, Paul Viviers.
Project management history is littered with failed PMOs, says Viviers. While there is a good argument for setting up a PMO - improving project performance, cutting costs, and instilling project management disciplines - executives are sceptical that a PMO is the right way to go, he says.
Many PMOs have under-performed on their original objectives, resulting in executives losing faith and cutting them off due to economic pressures.
Viviers says the slowing economy makes it even more necessary for organisations to have an effective PMO in place. Many projects still need to be undertaken and completed, as many are critical to the survival of the organisation, he says. The time has passed for organisations to continually throw money at projects until they are finished, he adds.
PMO role
Viviers says in order for a PMO to be successful, its place within the organisational structure must be consistent with the organisation's strategies and the expectations of management.
He outlines three basic models of PMOs. The first is the strategic (enterprise) PMO, existing at the second level of the organisation, reporting directly to the CEO. It provides strategic insight into organisational strategies and goals, and allows for active direction of the organisation's projects and operational initiatives, driving through value in all departments, he says.
The second type of PMO, a tactical business unit PMO, is situated within a particular business function or department. It has limited scope and authority outside of its immediate department, often struggling to implement any real change.
A temporary programme PMO is often associated with specific projects or programmes that have some expected end date. It has little or no influence outside the programme and is measured on the success of the programme, not on sweeping organisational change.
"An effective PMO must deliver value for the organisation, including governance, tools, templates, methodology, training, process and reporting - some of the key resources needed to deliver value," Viviers says.
An increase in revenue, profits, efficiencies and competitive advantage are the values PMOs are expected to drive back into the organisation, he says. Ultimately the goal is to positively impact on the organisation's bottom line, he adds.
Viviers notes PMOs can perform a critical function within any organisation. Its effectiveness depends on the services it provides, he says. Like any other department in an organisation, a PMO must constantly ensure it is providing value, he says.
Projects will always be a significant activity within any company, but a PMO that can help ensure the company's success will survive and flourish, he adds.
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