A Successful PMO - An Urban Legend?

An IT Program Management Office (PMO), or the more expansive Enterprise Program Management Office (EPMO), exists for two reasons: to drive improvement in the track record of project execution, and to optimize the enterprise project portfolio – both essential components in realizing successful business and IT strategy.

According to industry estimates, nearly two-thirds of   PMOs fail.  The reasons fall into several categories, but consistently a few are cited.  When PMOs fail to adopt new ways of prioritizing projects and continue to select projects in a more-or-less political fashion, business units with the most influence win the budget dollars and resources to pursue their pet initiatives.  The result is that organizations invest their money in PMOs, but fail to get the benefit of their investment: seeing projects with a direct impact to the business strategy completed.

Additionally, if the PMO does not have the control and responsibility over project selection, rogue project committees with political influence or budget dollars continue to operate, resulting in decentralized and fragmented project selection and execution.  The bottom line becomes a duplication of effort, wasted dollars, and poor morale across the enterprise.  Given these circumstances, even if the PMO survives, it is not surprising that 20% - 30% of projects fail to deliver on sponsor/stakeholder expectations.  (Statistics published via the META Group)

Beyond the organizational and political issues inherent in running a successful PMO, the current economic down-turn has forced many CIOs to redistribute already lean resources away from PMOs and EPMOs, or worse – shut down the PMO due to funding constraints or for what is seen as cost savings, albeit short term.  Although the poor rate of success for PMOs makes these decisions understandable, a case can be made that by eliminating waste, improving project success rates, and facilitating more effective resource utilization, an effective PMO will provide ample ROI to organizations eager to conserve funds.

So how do implement an effective PMO and avoid the pitfalls?  If two-thirds of them fail, what things are the other one-third doing right?  Digging down a little deeper reveals some interesting comparisons and common themes across many successful PMOs.

The one consistent theme across all of the ones that work is this:  these PMOs are set up for the right reasons.

PMOs are often established in reaction to a reoccurring set of problems in the IT organization.  Blown budgets, blown schedules and failing to deliver results to the business  encourage  senior management to institute better controls and designate a person or team to manage the overall project execution process – a ‘super’ project manager, in other words.  Many PMOs, although crafted with good intentions, are created to help management get their arms around what the issues are, and what the damage already is, with respect to failing projects and customer complaints.  It is for the most part a reactionary plan and not designed to make any real impact on projects going forward.  This tactical positioning guarantees that the PMO will be viewed by the internal IT organization as the enemy.  And let’s face it: IT generally does not need help losing a popularity contest across the enterprise.  Additionally, the PMO is oftentimes the liaison between IT and the business unit requesting the project.  Sooner rather than later, the business units grow tired of the repetitive “update” reporting and unfulfilled promises of completion, really the only result a tactical PMO can deliver.  The genesis of many of the serious project problems occur at project definition and can only be marginally improved by a tactical approach.  No one wins and customer service takes a dive.

When established to get control of already out-of-control projects, many PMOs, armed with rigid marching orders and lofty expectations from management, enforce a militant approach to the already dysfunctional reporting requirements.  They become too involved in the day-to-day operations and end up becoming nothing more than annoying to the project team.  In short, they become the “Project Nazis” and lose sight of the strategic purpose of the PMO by being too close to the work.

The PMO is not without its complaints.  Very real issues, such as trying to do too much with too few people and spending much of its time creating a myriad of reports for senior management, are commonly cited.

So how do you fix it?  What are the practices common to the one-third of successful PMOs?

Start here to get your PMO on track: An effective PMO should work for the project teams first and management second if they want to achieve any real results.

Successful PMOs don’t succeed by dictating, controlling or simply tracking standards. Gaining the project teams trust, as an ally, will serve a PMO best.  By regularly meeting and discussing issues with the project team, an effective PMO will gain an understanding of the key roadblocks, both at a micro and macro level.  Good PMOs never ask the project team for anything that does not have direct or indirect benefit.  Armed with this type of insight, a PMO Manager can discuss strategic issues that are a problem for the whole enterprise, rather than risks and issues for an individual project.  This then becomes substantive content for its reports to senior management.

Next, effective PMOs provide the project team with the right tools and practices to hit the ground running, making a difference right away.  Longer term, re-engineering the enterprise management practices are a good idea, but generally senior management, the project team, and especially your customers are looking for some much overdue relief in the form of results.  Results should be a PMO’s primary focus during the first 90 to 180 days of establishment.  A PMO should concern itself with reporting formats and control processes later.  In fact, oftentimes those mechanisms improve as a natural by-product of a well-managed and executed project.

In short ... continually search for ways to make the project teams’ jobs easier.

A PMO should be permitted to mature over time, needing to walk before it can run.  It is an investment like any other and takes time to bear its fruit.

It is a juggling act to manage an effective PMO.  Management requirements, project team needs and business unit demands all need handled real time.  Effective PMOs get the continual support of both management and the project team itself.

Management and the PMO should meet regularly and agree on prioritization of what projects best align with business and IT strategy, not political influence.  A PMO steering committee consisting of senior members of the CEO office and major business units, as well as core IT representation, helps the organization keep its priorities fixed on the business strategy.  Another benefit of this format is that all the major players remain apprised of PMO process and status, which aids in support of PMO initiatives and deter political short-cutting.

Once well established, the role of the PMO can transcend the IT organization to achieve an even broader impact on the enterprise’s project portfolio of business initiatives. The metamorphosis into an Enterprise PMO can a play a key role in facilitating communication and alignment between IT, the business units, and the organization as a whole.  As a neutral body, the EPMO can provide tremendous help in coordination of resources, project teams and business groups.  Active support of the EPMO by upper management is critical for success.  The EPMO also needs the support of the CIO, where the PMO usually originates, who can inform senior business leaders and IT management of the value of EPMO disciplines and processes.

The formula is simple:

The more effective the project team is, the more effective the project is.

The more effective the project is, the more effective the PMO is.

The more effective the PMO is, the HAPPIER your customers are and senior management is.