8 Reasons To Decide Whether Your Organization Needs a PMO
8 Reasons To Decide Whether Your Organization Needs a PMO?
In the previous post we looked at one of the scenarios or reasons whether you should consider implementing project management office (PMO) for your organization. Let’s look at the other important business situations or reasons you will consider for PMO.
2. Different project managers have different ways and tools to manage projects
If different project managers use different approaches, tools, techniques to manage projects, senior management would find it chaotic to understand progress, issues or challenges across different projects. PMO can establish common standards/practices, tools of managing projects across departments or within an organization. PMO can work with senior management to decide how to decide project priority, then establish clear criteria that would guide how each project should be managed, how a new project requests should be evaluated against given set of criterion and prepare a realistic estimate/forecast about cost, resources, timeline and when a project will be completed as per the priority level.
3. If a turnkey project or critical project is a major business driver for your organization
If one or two turnkey project or critical project are major business driver (like bread-n-butter earner, pun intended) for organization like major infrastructure project, or 4-G roll-out that typically involves huge capital investment meaning, the stakes are high, so is the risk. Such projects also take years to complete, which requires a structured and consistent and documented approach to manage project. It makes a viable business case for setting up project specific PMO. The PMO would then perform an analysis of existing process, lay down structure and formal way to manage project requirements, project execution, resource procurement, vendor management, etc. PMO can keep a watch on project execution to make sure that these projects are on time and within budget.
4. Organization is planning for massive change: Acquisition, new product launch
There are business case for setting up specialized PMO where organization is planning to undergo massive change: company mergers and acquisitions, new product launch, market entry, etc. These are typically strategic and crucial organization wide initiatives that warrants careful planning, monitoring, and management to execute organization strategic moves successfully. This would mean organization need a strategic PMO. If organization’s internal staff is skilled and experienced enough, they can function as a part of strategic PMO but if your organization does not have such capability, you may have to build one or source.
Generally strategic PMO functions as a top most level of PMO and it need not get involved into micro-management of activities, rather strategic PMO would delegate such execution activities to sub-level PMO. The strategic PMO has overarching authority and responsibility to execute such strategic moves that impacts organization wide stakeholders.
5. PMs are burdened with administrative activities, losing focus on business benefits
Project managers are burdened with trivial, administrative activities rather than focusing on project planning, delivering business benefits aspects. And this used to be a typical scenario wherein stakeholder’s would assume & expect that PM is the person who should be running around to have daily calls to seek update from project team members, rectify/correct/approve expenses & timesheet, submit approved expenses/timesheet to accounts, hiring project resources, update spreadsheet, set/conduct stakeholder’s meetings, prepare reports, communicate progress, etc. Though it is agreed that project manager is ultimate responsible person for a project but making him run for all trivial as well as administrative things means its energies will be spent on these activities and s/he is most likely get defocused from important project planning, project issues, resource-work assignment i.e. delivering business benefits from a project.
This is the scenario or a case where a project support PMO can be more useful and effective. This PMO help project managers with all required administrative support, doing necessary paperwork, system update – PMO in this case act like a like a back office center, thereby saving project managers time for actual project delivery activities.
6. Enable and provide a central guidance and support platform for project management activities
There is also another typical scenario that keeps project managers pretty occupied wherein they need training or support for using project management or communication tools or creating reusable project templates. In such cases a Center of Excellence or Central PMO can be useful. This central PMO enables a central guidance and support platform for project managers to do their jobs better.
There is slight distinction between project support PMO and Center of Excellence PMO. CoE PMO is in a position to offer customizable advisory service to guide project managers since it has overarching outlook or visibility across departments and it knows what will work better for a given department or a given project. Typically CoE PMO are seen working better for large enterprises and such kind of PMO has a bandwidth or afford to deploy PMO experts for specific areas like defining project scope, project scheduling, project training, etc.
7. If projects that your organization takes up are complex in nature and perceived risk of project failure is higher
This scenario or business case is similar to turnkey project as mentioned above; but when there are multiple projects that are complex in nature and perceived risk of project failure is higher. In such case just having project specific PMO may not be the best solution to reduce project failure risk. Though PMO experts may voice different solution, a combination of strategic PMO along with improvised version of project support PMO works well. The strategic PMO provide guidance and support from macro level and delegate execution level PMO activities to supporting PMO.
This combination implies project planning and execution is supported at two different levels and it ensures projects are delivered on time and within budget & scope. For example, if there is a change in statutory requirement or compliance requirement and it would warrant change in the infrastructure project, the PMO will assist project team to collate or supply industry data. The strategic PMO can deliberate whether this change can be done now or later, and how it will impact the project scope and in turn how it will affect the project cost and schedule. In short multi-staged PMO can help collecting appropriate information, support its decision with this information; set realistic expectations for project stakeholder’s about the project change.
8. Enable better decision making while taking up new projects, managing projects, resources & Pave a way for Project Portfolio Management at your organization
If your organization is moving higher up in the project management value chain, higher management would be serious about more organized approach in managing multi-projects strategies. A project portfolio management will evaluate whether new project request should be entertained, how new/existing projects should be evaluated within a given portfolio, having a performance parameters (KPIs) across portfolios. A good PMO can set a stage for project portfolio management at your organization.
PMO can help portfolio managers will all necessary information to make project portfolio decisions; it can help portfolio managers to set policies and practices for taking up new projects, how change requests should be handled in a given portfolio, etc.
Having said all above things, one must understand that PMOs is not any magical wand that will make project difficulties/challenges vanish. No. PMO is expected to provide a structured, well informed/evaluated approach to manage projects better. It will not bring immediate cost saving or quick project success, PMO does not provide any such magical solution to fix problems that are inherent to a given organization like culture, resistance to change etc. But going by statistics reported in the survey, respondent have expressed confidence in improving project delivery.
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