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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