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Challenges and Sustainability of the Program Management Office

What’s a Program Management Office (PMO)?  Good question and one that’s at the heart of why many seemingly successful PMOs fail to thrive.  That is, they haven’t clearly stated why they should exist and exactly what they are supposed to accomplish.

Having established a PMO in the IT department of a local government, been a member of a team that established the PMO in a travel department of a fortune 500 company, and established many of the processes in an IT PMO at a gaming company, it’s no surprise to me that so many PMOs are born then die within a relatively short time.

  • 2006 PMI survey: Only 17% of PMOs have been in existence for more than five years
  • PMI 2007 white paper analyzing the current state of play: Almost 50% of survey respondents indicated the existence of their PMO was being, or had recently been, seriously questioned.
  • PM Solutions 2010 survey shows 50% of PMOs closed over the prior four years.

When you hear about seemingly successful, yet ultimately failed PMOs, you’ll find these recurring themes:

  1. No clear mission
  2. Lack of the right sponsorship
  3. Lack of compliance to PMO processes
  4. Failure to integrate into the business
  5. Lack of mature project, program, and/or portfolio management
  6. Failure to establish metrics and success criteria

1. Off-Target – No Clear Mission

The PMO must have a charter with a clear mission and vision statement so there is no confusion as to its aims and value.  Each PMO is different so it’s essential to the success of the PMO to identify what it will do in your organization.  Which areas will the PMO govern?  What specific objectives do you want the PMO to achieve in each of those areas?

Your sponsor didn’t request a charter for your PMO? – do one anyway. 

The business’s identifies their strategy, that is what they want to accomplish, and their tactical action plans, aka projects, define how they will accomplish it.  It is imperative to see a major objective of the PMO as the business unit’s key partner in achieving their tactical action plans.  If you do projects as an order taker, ‘tell me what you want’, without understanding the business need, you leave yourself vulnerable to implementing solutions that fail to achieve the business need.  If at the fundamental level your PMO is all about processes and not about helping the business achieve their plans, you’re on a road to failure.  It’s not about templates or dashboards it’s about enabling the business to achieve their business strategy through projects. The PMO must be seen as the enabler of business change.

2. Who’s Driving the Bus – Lack of the right sponsorship

When the PMO is viewed as a process organization it is often placed under a lower level manager.  This is consistent with PMOs that lack a business aligned mission, fail to report metrics, and with the perception in the organization that the PMO is just project process cops.

It’s easy to see, then, why when budget cuts come around the PMO is high on the list for elimination.  With no high level sponsor to fight for the continued value of the PMO and lack of understanding how the PMO is essential to achieving business strategy, PMOs become dispensable.

Clearly it’s not just having a high level sponsor, but having one that believes and understands the PMO mission.  In fact, to be safe, assume they have no idea what project management is, let alone what program and portfolio management is, nor what a PMO can do.   Remember that most people are unaware that project management is an approach to doing projects that requires special training and experience.  Worse yet, they believe that they do know what project management is.  After all they know what a ‘project’ is and they know what ‘management’ is, therefore they believe they know what ‘project management’ is.  I call this “the Donald Trump version of project management” a la the way he assigns a project manager in his Celebrity Apprentice show.  You know the “Hey you.  You’ve done projects before and you’ve managed before, right?  You’re the project manager”.

3. If Momma aint’ happy – Lack of compliance with PMO Processes

You know the expression “If momma ain’t happy, ain’t nobody happy”?  Well the same is true for project managers.  If the project managers ain’t happy, ain’t nobody happy.  For the PMO to be successful projects need to be successful.  For projects to be successful, program, project and portfolio management needs to be successful.  For these to be successful, project managers need to be successful.

If the project managers perceive the PMO processes to be just over head with little value, then they’ll do everything they can to short cut those processes.  So be sure the processes work for them and they’re not working for the processes.

Adopting new processes is a cultural change and it’s important to address how you will effect that change in the PMO implementation and sustainability strategy.  How are changes introduced?  Did the PMs have any input?  How were the PMs trained?  What support do the PMs have now?    

When project managers short cut PMO processes, the whole house of cards falls.  To ensure PMO processes are being followed, mandatory Toll Gate Reviews can be very valuable.  

PMOs that are involved in project manager quality, not just processes, are more likely to succeed.  Involvement can mean hiring the project managers (regardless of who they report to), providing skill development, and providing coaching and mentoring. 

PMOs who believe they exist to maintain dashboards and reports for upper management don’t get it.  Your key to PMO sustainability is to ensure that project managers are successful.

4. Because I said so – Failing to integrate into the business

Project participation from the business unit is essential to the success of projects.  Stakeholder representation, subject matter expertise, project champions, deliverable reviewers and verifiers, are business roles.  If the PMO has developed its processes without considering the impact on each business unit, then cooperation and support from the business will be hard to come by. 

Like the PMs, if the PMO expects the business to adopt new processes then this is a cultural change and it’s important to address how you will effect that change in the PMO implementation and sustainability strategy.  How are changes introduced?  Did the business have any input?  How were business representatives trained?  What ongoing project support does the PMO provide?  How do the PMO processes fit with the way the business operates? 

An overly burdensome project request process can alienate the business.  PMOs that require very little information at request time will be more accepted by the business than those that expect the business to provide highly complex and detailed information at request time.  It’s more business friendly to meet with the requester after the request is received and assist them with whatever additional information you need.  Don’t make them provide volumes of information up front just to get a request submitted.  It’s essential that the PMO is perceived as a partner of the business, not an adversary.  Be what helps them get things done.  Don’t be the biggest road block they have to getting things done.

5.  You can’t build the building without a firm foundation – Lack of mature project, program, and/or portfolio management

Expecting to implement a mature PMO with a “big bang” approach is another set-up for failure.  Assess your company’s maturity in project, program and portfolio management.  Then if there are major gaps to where you should be, address those gaps first.  It’s not uncommon for a sustainable PMO to take several years to reach a high maturity level.  Just be sure to bring value at every step along the way by ensuring the organization’s pain points are alleviated early in the PMO’s life.

Become successful in project management before working on program management.  Be sure your project manager’s skills and capabilities are at a level for them to succeed.  When that foundation is strong, develop a mature portfolio management. 

Don’t forget Resource Management.  This can be a real deal breaker for many PMOs.  PMOs that fail to do good resource management will be perceived as being ineffective.   The challenge is that you cannot manage resources effectively without being able to accurately estimate project durations so that you know when resources will be available.  Understanding this means ‘estimation capabilities’ rise to the top of the PMO’s ‘to do’ list and are critical to Project, Program and Portfolio success and therefore to PMO success.

Assess whether the PMO is nothing more than a repository of tools and templates, or if it is an enabler of achieving business benefits.  When the business perceives the PMO as the essential organization that enables them to achieve project benefits, then you have arrived.  If you’re viewed as process cops, you’re doomed.

To avoid being perceived as no-added-value overhead, be sure to have the right balance of process and governance with flexibility.  Take “lean” to heart and get the paperwork down to the bare bones.  Become the ‘go to’ people when projects are stuck or in trouble and any time a project manager needs assistance.  Never ever let PMO compliance be the cause of project delays.  Create scalable processes that vary by project type and size. 

6. You can’t manage what you don’t measure – Failure to establish metrics and success criteria

No one asked you to establish metrics for your PMO? – do it anyway.  No one asked you to define the success criteria? – do it anyway.  The concept that you have to “sell” the value of a PMO comes up in many PMO articles.  But if you look at other business units in your company they don’t sell the value of their unit, do they?  What they do is show their value in reports and scorecards. 

To do that they need to have their target goals (criteria of success) and their metrics that shows where they are against those goals.  You’ll see the sales goals and their current sales.  You’ll see Human Resources reporting their personnel retention goals vs. the number retained. 

Then when the ‘what have you done for me lately’ question comes up in budget cutting discussions, units that have consistently shown their value are not hit as hard as those who have not demonstrated value.  It’s no wonder that PMOs who do not continually and consistently show their value to the company are often the first to go in hard economic times. 

According to Gartner, IS organizations that properly implement a PMO will experience half of the project cost and schedule overruns compared with those who do not.  Metrics can show the business value (e.g. 95% of project KPIs are achieved in 90% of projects), functional performance value (e.g. rework is reduced by 15%) and service level value (e.g. Customer satisfaction 90% satisfied or very satisfied) the PMO brings to the organization.  Metrics are essential for getting needed support.  They demonstrate progress, value, and productivity.

And don’t forget to celebrate.  Celebrate project successes, project manager successes and PMO successes.

It’s unbelievable the number of apparently successful PMOs that end up closing their doors after a few years.  There’s no need for yours to be one of them.  

Don’t forget to leave your comments below.

Ricki Henry,

  • 19+ years as a project manager
  • Established the PMO at Clark County NV, co-developed two other PMOs
  • PMP, Six Sigma Green Belt, Certified Scrum Master, MS Project Server Black Belt, PMP exam preparation Trainer
  • Speaker on BA and PM topics

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