Is the PMO dying? 3 ways to Increase Capability
The PMO – the project, program, or portfolio management office – often gets a bad rap. When you say, “PMO,” to senior executives, they may envision the good, but what they often tend to get is the bad; an administrative function that moves paper around. But that is not how it should be.
The basic idea of the PMO is a solid one. It’s very difficult, for example, to run a major program where you just let a lot of project managers run around on their own and expect them to deliver. An organization needs some integration across projects to really deliver results, and that work typically comes out of a PMO.
The bad rap of the PMO hit its peak several years ago. All the talk was around its eventual elimination. Yes some of this was fear talking with the rise of Artificial Intelligence, but most of the conversation was valid and necessary. Why you may ask? Nearly 70% of organizations in 2017 had PMO’s, however the majority of them were unable to quantify their value, a term referred to as “Zombie PMOs”. In fact, Gartner predicted that by 2020, those PMOs that delivered poor business value and failed to be proactive would be eliminated. Dead End.
There was a time when simply managing project execution (e.g. scheduling, resource management, etc.) was all that was needed to ensure that the PMO was delivering value. That’s no longer the case. With all the work that is going on – innovation, rapid product releases, lean process improvement – the PMO provides the glue that integrates a bunch of disparate efforts. The PMO is the one who is best placed to help you integrate the various work streams across your portfolio of programs so you can make sense of what is in flight and make strong decisions on what to do next.
But in order to do that – PMO’s today need to adopt a more strategic mindset, looking beyond managing just the tactical aspects of project execution and linking their projects and programs to the corporate strategy. Unfortunately, as surveyed by PMI Pulse of the Profession 2018, “only 41% of organizations with an enterprise PMO in place, feel that it is adequately aligned to strategy.”
Since 2006, PMI, the Project Management Institute has been surveying the Pulse of the Profession, keeping track of the major trends. Since 2012, the percentage of organizations with PMOs has remained roughly the same, hovering at 68%. So while the PMO is not dead, is does need to transform.
And the only way to do that is to increase your capability.
Increasing PMO Capability Three Ways
To take a simplistic view, there are three ways that you can increase the project management capability of your organization.
One is to make a dedicated effort to build up the skills of internal staff. But the challenge with that approach is that it can take a long time to instill PMO maturity if it doesn’t already exist. Project Management is a complex discipline spanning various methodologies (Agile vs. Traditional), knowledge areas (scope, cost, time, stakeholder management) and aspects (project, program, portfolio or change management). Another key factor – building a permanent resource pool when the project or program is a temporary effort; as the PMO won’t necessarily be needed when the initiative is done.
A second way to construct an effective PMO is by outsourcing. Here we specifically mean bringing in contractors or specialized skill. This avoids construction of a permanent operation that will just need to be dismantled in the future. Also, bringing in a group of individual contractors can be fairly inexpensive compared to staffing up internally. However, with this approach, getting contractors to operate as a team can be difficult. When things don’t go right, there’s no single point of accountability in order to target a fix. And it can create a procurement nightmare in managing multiple separate contracts.
A third way – one we like to recommend, hey you are on our page – is to consider tapping into a managed service for the kind of output you’d expect from a PMO. The advantage of this approach is that it makes for predictable delivery of services with predictable quality and predictable pricing.
The pricing, in fact, is based on output. If output isn’t delivered as contracted, you don’t pay. You do this by building metrics into your service contract.
Have more questions on why we think PMO Managed Services or PM as a Service is the model for the future? Check out our next article.
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