June 14, 2012 | Author: PM Hut | Filed under: Project Management Office
Building an Effective PMO
By Genevieve Priebe
The guiding principles of a Program/Project Management Office (PMO) are easy: to provide a framework by which to prioritize new projects based on business criteria and to ensure those projects remain aligned to organizational goals to deliver maximum business value. A well-executed PMO will increase efficiency, streamline processes, and provide repeatable frameworks to save time and money. Sounds pretty perfect, right?
So, why are some companies hesitant to build their own PMOs or even look to improve their existing capabilities? Why do many top executives see investment in a PMO as an extra level of bureaucracy, the cost of which far outweighs the benefit?
The flaw in many PMOs is not the quality of their deliverables, frameworks, resourcing, or execution. It is that during creation, the PMO is not positioned for success and longevity. The early stages in the life of a PMO are crucial in expectation setting and securing buy-in and commitment from key executives and the larger project community. Here are five considerations to ensure your organization’s implementation of a PMO is a success.
- Organizational Tolerance
There are as many different types of PMO as there are types of organization. To maximize the potential success of a new PMO, it’s imperative to start by understanding the organizational tolerance for the structure that a PMO brings. Challenge yourself and your team to answer the following questions: how mature is your organization? Is your corporate culture predisposed for, or against, structure, process, and project rigor? Will your leadership team actually relinquish control and empower the PMO to enable change? How change tolerant or averse is your leadership team? Before anything else, determine what business strategy the organization needs the PMO to drive and what corporate culture the PMO will support.
Speak the Language
Before getting mired in the detail of a PMO –before forming a project team, setting up status reporting, defining the timeline, or even drafting a charter for Project #1 – it is imperative to sell the benefit of the new PMO to senior leadership in a way that resonates. Put it in terms of dollars and cents. A very tangible metric like expected return on investment (how many dollars will we save for every dollar invested in implementing a PMO in our organization?) can help to both set expectations for senior leadership in terms of output, but also help explain the initial investment necessary to implement a PMO correctly. The more communication surrounding change, the better, as engagement builds commitment.
Make Tangible the Intangibles
A well-executed PMO will drive more than just ROI, cost savings, or other easily quantifiable benefits. For example, standard and consistent monitoring of project performance will provide your executive leadership with the visibility and ability to prioritize projects to drive results. Your PMO may paint a clearer picture of resource utilization for more efficient use of the existing workforce and a more turn-key process to retain new resources. The benefit may even be as simple as improving communication across business units to reduce redundant effort/expense between similar projects. Whatever the upside, be sure to set expectations about the additional qualitative benefits your organization’s PMO will enable and in what timeframe those improvements can be recognized.
Just as a successful project has built-in measurements to determine ultimate success, so should a successful PMO.Determine early what success looks like in the first six months, in the first year, and after five years. Does success mean having project acceptance criteria, a prioritization framework, a standard ROI analysis or charter for each project? Or, does it mean rigor around resource utilization and accrual of time to the right project? Or is it as simple as ensuring that each project has an executive sponsor and a defined budget/implementation timeframe? Align your PMO’s success criteria and measurement with key organizational metrics and measure it through the same process and at the same time. Ensure key executives and stakeholders are also accountable for the same guiding principles that the PMO supports. Monitor your progress and when progress slows due to organizational or personal resistance, defuse it as early as possible.
Eyes Wide Open
Perhaps most importantly: a PMO should not come as a surprise to anyone in your organization. Communicate about the PMO formation early and continue communicating as often and at as many levels in the organizations as fits with your company culture. Answer the questions “Why?” and “Why now?”.Make the case for change simple, measurable, and clearly linked to the corporate agenda.
If there’s one thing that you can count on when implementing a PMO, it is that you will have naysayers who don’t agree with the PMO approach or refuse to recognize its value. Regardless of the cynics, if you’ve defined key metrics, highlighted added capabilities, communicated clearly about the change, and given stakeholders and employees a timeframe in which they should see benefit, you’ve provided the foundation upon which a strong – and effective – PMO can be built.
Genevieve Priebe is a senior manager at ACME Business Consulting in Seattle Washington. She has more than 12 years experience in the areas of business and technology program management, solution development and implementation, and organizational transformation.