Is the PMO Necessary for Project Success?

The project management office – or PMO – is generally considered the proper project management infrastructure for project-centric organizations.

Does your organization run and manage individual projects to get internal and external customers work done? Or do they just assign people to develop software and work with clients in planning, risk and issue management? If they run mostly projects than you likely have – or should have – a centrally focused and managed project office. Why? Well, to know that let’s discuss the major benefits that such a project-centric focus can bring to the organization and the customers it serves…

Consistent delivery.

Having a central project office or PMO allows an organization to staff and plan work for experienced project managers who are trained to effectively and efficiently lead projects, manage financials, lead skilled project teams and the customers they serve. The PMO guarantees the PM focus. Without that infrastructure, it’s difficult to justify putting a PM team together not knowing what type of utilization those resources will actually have.

Consistent and repeatable project successes.

Having skilled project team members ready and a trained pool of experienced projects managers available helps organizations to better serve their project clients. Having the tools and templates those team members and project leaders need available for every project helps increase the likelihood of ongoing project successes on a consistent basis rather than just succeeding on projects based on luck. Everyone will take a little luck now and then, but consistent project success comes from an experienced staff and defined, repeatable processes and re-useable tools and templates.

Budget management.

Rather than just running projects or doing work, with the PMO in place the project managers will be performing better project budget management by utilizing structured processes for estimating, tracking, analyzing, forecasting and re-forecasting project financials. Watching them closely on a weekly basis and getting accurate updates from accounting for actual project expenses means they can stay aware and keep potential project budget overruns in check. Watching and re-forecasting weekly means project budgets will likely never go more than 10% over plan – a very fixable number. Left unchecked, it’s so easy to end up with a 50%+ budget overrun without realizing – a hole that is nearly impossible to dig yourself out of.

More effective use of project support resources.

With the project office, project resources will be tracked better and utilized more efficiently. How? Through proper tracking, utilizing a recognized pool of skilled project resources with the right tool set and a gate-keeper process of requesting and getting the right mix of talent added to your project team. When projects or work is done in a non-PMO environment, resources are not generally considered assignable from a skill set standpoint like in a professional services matrix type resource environment that is focused on a project-centric delivery organization. The PMO brings structure to that process and helps make each project team the best it can be at any given moment and the right fit for the project and project customer.

Improved financial performance for the organization.

From the always critical financial performance standpoint, the PMO will bring improved financial performance to the organization. Project finances are considered on a project by project basis as well as across the portfolio of projects, and structured processes are generally in place to ensure budgets, budget health, and overall financial performance is a key factor in all project status considerations. It’s not just about getting the work done as can be the case in organizations that are just performing work on an as needed or requested basis without planned tools in place. It’s about managing each project right from the outset – including planning and financial oversight utilizing consistent tools, delivery and status reporting ensuring that each project budget never gets too far out of hand no matter what issues arise.

Continued organizational growth.

With a structured PMO, the organization has a better chance to achieve continued organizational growth. Why? Because a structured PMO will allow the organization to better plan for customer projects and have staff available and ready to assign to project work. In the non-PMO environment, work is often promised to customers based more on financial need and customer need without also considering “can we deliver?” and “do we have the right staff available at this time to deliver?” Too often resource shortages come up when critical work needs to be done because the non-PMO environment makes it much more difficult to look at and consider the entire landscape of resource needs and availability to successfully deliver on the projects you are lining when the customer needs those projects completed. It’s an awkward situation to walk into when you must explain to a customer that you just don’t have the right resources available at this time even though they are expecting you to start delivering on a $650,000 technical project. Oops.

Better career leadership growth to serve projects, the customer and the organization.

The PMO is usually in place for several reasons – the #1 reason being to enable the organization to more consistently deliver successful projects to the customer that are also profitable to the company. But another key consideration is acquiring and nurturing a skilled staff of project delivery personnel and included in that is the planning for training and career growth for each of those individuals. In the non-PMO environment, project leaders and team personnel may be just warm bodies available at that moment to take on the next customer engagement. The PMO plans for this and makes sure that the resources are skilled and continue to grow those skills allowing the organization to take on new and different projects resulting in increased revenue in new technical and project delivery niches because the staff is continually growing in skill set and delivery ability.

Summary / call for input

The bottom line for me anyway is that yes, the organized PMO approach is necessary for project successes on a regular basis in the organization. What your important customers will see is an organized and professional effort – every time out – to deliver expertly on each of the project engagements. And that’s huge – that’s what project management is all about, right?

Readers – what is your reaction to this list? Please share your ideas.