Why Implement a PMO?

If you are in the business of delivering projects and have problems delivering projects on time, within budget, and within an agreed-upon scope of work, then a project management office may be what you need to improve the quality and delivery of your projects. You may need a PMO if your organization is encountering any of the following symptoms:

  • Projects are often delivered later than promised
  • Projects often run over budget or at a cost greater than estimated
  • Project estimating is faulty and inconsistent from project to project
  • Clients (or internal customers) complain about project delivery
  • Clients (or internal customers) complain about incomplete scope or missing functionality
  • Stakeholder expectations are not formally managed and are often misunderstood
  • Skilled resources are usually not available when needed
  • Project status reporting is inconsistent and faulty
  • Projects are not prioritized which leads to project and resource conflict
  • Project processes are inconsistent from project to project leading to an inefficient use of resources

So, what is a PMO and how can it help? There are many variants of a PMO in the corporate environment but for the purpose of this paper, I would like to define a PMO as a supporting organization that exists to provide project management support and to improve project delivery. Given this loose definition, I believe that an effective PMO can deliver the following benefits:

  • A decrease in the project failure rate
  • An improvement in meeting project cost, schedule, and scope objectives
  • An improved prioritization of projects leading directly and indirectly to an improved Return on Investment (ROI) on project investments and human resources
  • An alignment of projects with the strategic objectives of the enterprise
  • An improved client satisfaction with project delivery
  • Improved estimating and ROI calculation processes leading to the cancellation of uneconomic projects and improved project and enterprise profitability

According to a survey conducted by CIO magazine and the Project Management Institute in February, 2003, fifty percent of the respondents reported that “project success rates have increased as a result of having a PMO.” The survey also indicated that “project success rates (defined as completed on time, within budget with all original specifications) have increased by 46%.” (Ware, 2003)

The same survey indicated the following common characteristics of the PMO (more than 70% of the respondents shared these characteristics):

  • Ensures that similar projects are executed according to consistent processes
  • Provides project management training and mentoring
  • Conducts post implementation project reviews including the capture of lessons learned
  • Manages process and project reporting and tracking
  • Contributes to the development of core competencies in project management
  • Is supported and/or sponsored by Senior Executives