The PMO Is Not Project Management Overhead

October 3, 2009 | Author: PM Hut | Filed under: Project Management Office

The PMO Is Not Project Management Overhead
By Curt Finch

We are currently facing a challenging economic climate which is forcing many companies to cut costs in order to survive. There are different ways of doing this, and unfortunately, a popular one is slashing employees, projects and even entire departments. Consequently, almost everyone in the business world is now looking for a way to justify their work to upper management and other stakeholders in order to be spared.

Many executives do not fully understand the value of the PMO in their organization, endangering the survival of the PMO when the time comes to cut back. The answer to this problem is threefold: PMO managers first need to focus resources on the right projects, then ensure that these projects are successfully executed, and finally, effectively communicate the value of these projects to upper management.

Step 1: Refining the Focus

The PMO’s primary responsibility is to manage and execute projects that are central to the organizational goals and objectives. This requires an understanding of both the business strategy and the projects that fall beneath it. Beyond that, it is important to know which projects are short-term, mid-term or long-term. During a recession, many long-term projects are abandoned. On the other hand, if you work solely on short-term projects, you will not be needed once they are completed. For this reason, it is best for PMOs to focus their efforts on a combination of short- and mid-term projects that align with company strategy.

Step 2: Executing Projects On Time and On Budget

Prioritizing projects is important; successfully completing them is imperative. No organization has any use for a PMO that does not achieve its goals and get things done. There are several key components to accomplishing this. First, project managers need visibility into resource allocation in order to avoid over- or under-booking project team members. This will also ensure that no projects are taken on that your resources cannot accommodate. In addition, team members need to track their time by task in order to provide actuals, helping project managers to understand true project costs and estimate future projects with accuracy.

When project managers can understand what resources are working on and measure actuals against forecasted timelines, they have a better handle on project problems, allowing them to address them faster and with more success.

Step 3: Communicating Results to Management

Once you have the positive project results, you need to ensure that top executives at your company are aware of them. Fortunately, some solutions for managing resources and projects also have dashboards and reports to make this information quite clear. This gives you an opportunity to tell the executives, “These are all the projects we are working on to help achieve our organizational objectives, and here is data that proves that we are executing them successfully.” How can they possibly argue with accurate, up-to-date project data?

According to recent statistics, 35 million project managers use Microsoft Excel as their primary project management tool, and 20 million use Microsoft Project. These tools can be useful in their own ways, but they certainly cannot provide the type of data that management needs to see from the PMO. Rather, a solution that incorporates both project plans and time tracked against each project (by task) must be implemented in order to help executives see what the PMO is striving for and how well they are measuring up against these goals.

Prove It

Ultimately, the best way to avoid being viewed as ‘project management overhead’ is to deliver real value to the organization, which means executing projects successfully. It is not enough to create elaborate project plans. The goal of the PMO is to execute these projects and help move the business towards its objectives. Once you have a firm grasp on resource availability and have your team members tracking their actuals, you will be able to keep tabs on how the projects are going, as well as know who to talk to when there are bumps along the way. Executive visibility into all of this data is also essential.

PMOs today have a choice – they can either justify their existence by highlighting their achievements and illustrating their true value, or they can fall by the wayside when cuts are made. A project management solution that combines project tracking with financial reporting enables the PMO to speak the language of the executive and therefore succeed where others fail.

Curt Finch is the CEO of Journyx (http://pr.journyx.com), a provider of Web-based software located in Austin, Texas, that tracks time and project accounting solutions to guide customers to per-person, per-project profitability. Journyx has thousands of customers worldwide and is the first and only company to establish Per Person/Per Project Profitability (P5), a proprietary process that enables customers to gather and analyze information to discover profit opportunities. In 1997, Curt created the world’s first Internet-based timesheet application - the foundation for the current Journyx product offering. Curt is an avid speaker and author, and recently published “All Your Money Won’t Another Minute Buy: Valuing Time as a Business Resource.” Curt authors a project management blog at www.project-management-blog.com, and you can follow him on Twitter at http://www.twitter.com/clf99.

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2 people have left comments

Good article - below is a similar argument from my own PMO experience:

The PMO – Too valuable to lose

As organizations try to deal with the economic downturn, they’re taking a hard look at the ROI of just about every endeavor—including the Project Management Office (PMO).

At Siemens Product Lifecycle Management (PLM) Software, we believe our PMO for the EMEA region still continues to bring value both to the organization and our customers.

Many PMOs are being challenged on a number of fronts, including being viewed as just administrative support units, as an unnecessary overhead that slows project management work, and as not delivering business benefits.

Even in these challenging times, the PMO within Siemens PLM Software is deemed ‘fit for purpose’ and I believe it’s because we have evolved to be seen as supportive of the organization as a whole and not grown to a size that outweighs our business benefit.

We are too valuable to lose but equally important; we are not too expensive to keep

A PMO is a group or department within a business, agency or enterprise that defines and maintains standards for project management within the organization. The primary goal of a PMO is to achieve benefits from standardising and following project management policies, processes, and methods, and generally assumes one of three styles, being either supportive, controlling or directive in approach.
Summarizing this then a PMO should:
• Ensure that all projects are aligned with the overall business strategy
• Highlight key project inter-dependencies and align releases across interdependent projects
• Assist in timely decision making on the overall control of projects
• Approve change requests of global relevance
• Monitor and report on projects

From its inception three years ago, our PMO focused on people and process. The original ‘pitch’ to the business, as we justified the initial investment, was to focus on the 5 ‘Ps’:
• People
• Process
• Promotion
• Performance
• PM Information System

With an immediate priority of focusing on ‘People’ and ‘Process’ the PMO completed a number of ‘baselining’ activities:
• A Maturity Assessment was completed
• A survey undertaken identifying the PMs experience and challenges
• A ‘bring out your dead’ project amnesty was promoted in order to find the true ‘health’ of all of the projects out there (or lack of health in some cases)

The survey of the project management community members identified three top issues:
• A lack of methodology or common process
• A lack of skills or training
• Resource management challenges

So the immediate focus was to improve these three critical gaps – the PMO supported the development of a global methodology and training of all PMs, PMP certification began and improvements in resource management commenced.

By developing internal programs aimed at addressing these issues, the PMO was immediately seen as a supportive organization and not merely as an administrative overhead.

Beyond the initial focus the PMO extended its purview to performance and promotion shortly after formation. The move has ensured good communication of the PMO’s benefits to management and customers. Delivering a regular newsletter, hosting knowledge-sharing sessions, showcasing project case studies, inputting updates to our methodology and never saying “no” to requests for assistance have all helped put the PMO on peoples’ radar as an organization that helps rather than hinders.

Conclusion

I strongly believe the PMO has a place in a project based organization, even in these times of restricted finances. In fact, I believe they have a place especially in these times.

On one hand, companies of all kinds face the global recession. On the other, we are part of a dynamic, resourceful and ever-evolving world that demands change as part of its survival. And change demands projects, and projects demand project managers.

Those projects that will be commissioned in the future, as well as the ones that are allowed to continue in the current climate, will be expected to deliver higher business impact, endure closer scrutiny and face far more pressure to deliver.

And who will be under the most pressure? You guessed it, the project manager.

Right now our projects, and our project managers, need the help, support and guidance of a good PMO. Just make sure that your PMO’s focus is the right one for your business.

Peter Taylor wrote on October 5, 2009 - 9:56 pm | Visit Link

Peter,

Thanks for your comments. I’ve followed you on Twitter and taking a look at your ‘lazy’ blog. You are preaching to the choir. Keep up the great work.

curt finch wrote on October 9, 2009 - 2:41 pm | Visit Link

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