PMOs are frequently portrayed as a panacea for an organization's project management issues. Evangelists will pontificate that without this organizational construct, the ability to achieve excellence in project portfolio management (PPM) or project management execution is often unreachable. They may also point to the value of a PMO as an efficient means of gathering, normalizing, and communicating project and resource decision support information.

However, PMOs do not come without costs and challenges. PMOs struggle to deliver measurable business value within their first year of existence while at the same time incurring significant costs. These costs might result from consulting services purchased to facilitate the setup of the PMO, the total cost of ownership of tools to support the PMO as well as the recruiting and ongoing internal labor costs for PMO staff. Organization conflicts that can accompany the launch of a PMO can impact productivity and employee morale - if the mandate or authority for the PMO is not well defined and communicated or if there is a shift in authority from functional managers to project managers, a power struggle could occur that reduces perceived value.

Failure rates for PMOs are high (surveys have reported that between 20-25% of PMOs will not survive more than three years) and given the upfront costs and delayed achievement of business value, organizations should be absolutely sure that a PMO is the best way to achieve their PPM or PM-related business objectives. There are alternatives to setting up a PMO to address tactical issues such as project failure - better engagement of stakeholders, true project sponsorship, basic project management training for all staff and having skilled project managers are a few methods of achieving the same desired goal without the need to set up a PMO.

I've worked with many clients for whom a PMO was viewed as the "home of project management" - within its walls, project management flourishes and miracles are performed to get troubled projects back on track. However, outside of this utopia, behaviors do not change - governance practices are still afforded only lip-service, resources are still vastly over-allocated and excessively multi-tasked, project sponsors continue to remain invisible and project commitments are made without proper planning or justification.

PMI's envisioned goal that "Worldwide, organizations will embrace, value, and utilize project management and attribute their success to it" underscores the need for our profession to transcend an artificial construct such as a PMO. I draw an analogy to the evolution of quality in the manufacturing industry - so long as it was viewed as being performed by a quality control or assurance group, it failed organizationally. Only when it becomes a core component of all organization practices does it truly flourish.

Setup a PMO, and you risk establishing a crutch that prevents an organization from truly institutionalizing project management - while PMOs can facilitate improvements within low maturity organizations, I believe that in the not too distant future, successful organizations will look at PMOs as being as obsolete as a mimeograph machine.

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written by Deedy Sample, January 13, 2010

Being the force behind two PMO implementations, I must attest to their value, even for the mature and successful organizations.

I side with those stated in your opening, that “point to the value of a PMO as an efficient means of gathering, normalizing, and communicating project and resource support information.” Those activities are not only beneficial in controlling inflow and effective resource utilization, but also in addressing or canceling out of control/failing projects, which have been widely documented as the source for the loss of millions of dollars.

I suspect that failing PMOs lack executive support/direction, authority, control, or a combination thereof. A crucial event towards PMO success is defining measurable objectives as the goals amongst organizations can vary. And of course, these objectives must be planned and executed in a strategic fashion with realistic timeframes.

I agree that PMOs are not “a panacea for an organization’s project management issues,” but they can have value when focused in the right areas.

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written by Kiron Bondale, January 15, 2010

Thanks for your feedback - I completely agree that planned & implemented the right way, a PMO can make a very positive difference to an organization. The PMO can focus on "pushing the envelope" for continuous improvement in the organization's PM culture and practices.

However, many PMOs operate in a fashion that does not support this type of organization capability improvement and that's where I can see that in the future, companies that have truly institutionalized PM practices may setup PMOs as required to provide oversight for (temporary) Programs, but PPM practices and the planning & execution of "standard" projects will be an organization-wide capability and responsibility.

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written by Clifford B Vaught, January 29, 2010

What is the point of this article? You offer nothing in return. I worked in a PMO for nearly a decade and the client recognized it as the reason we had impeccable delivery. What do you suggest then? Every PM for themselves? PMOs are not just setting the standards/processes for PMs. They need to generate value and sell themselves as such.

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written by Kiron Bondale, January 29, 2010

Thanks for the feedback, Clifford.

I did not indicate that PMOs are of no value, but instead envisioned (similar to PMI) that if project management truly is institutionalized, the need for PMOs in most companies would be eliminated.

Of course, to reach this state, organizations do need to truly embrace project management and not give it lip service the way most areas (outside of the PMO) would AND it is essential that appropriate automation/technology is in place to make project communication and decision support information access seamless.

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