Half of new PMOs are shut down within 3 years1. Scary… and it reminds me a bit of a TV program we have in the UK.
Grand Designs follows a member of the public who has taken on a massive project: building a new home. The homes are usually rather grand (hence the title) or unusual (one guy built a house out of straw, another built a cave-house).
Most of the “victims” have chosen to act as project manager themselves. Why do they make that decision? Well, they believe it will save money and, really, how hard can it be? Yet this one decision – to take on the project management themselves - is often the root cause of many of massive cost over-runs, delays and sleepless nights.
Setting up a PMO is a little bit like building a house, only worse. So, what’s to be done?
Why is setting up a PMO so difficult?
Setting up a PMO is hard work. It takes time and skill. Not only do you have lots of things to “get done”, you also have multiple stakeholders who have diverse opinions. This “input” not only covers what should be done but also how it should be done. Not all of these opinions are useful… or even benign.
Think about what needs to happen. Here is a subset of the things a PMO is often expected to achieve (for a more complete list of “What a PMO does”, check out this site). Note that the PMO does not have “total control” over any of these items:
Get control of projects
Put in place project reporting and governance
Tools, systems, processes, organizational resistance to “overheads”, resistance to change, lack of clarity of goals and ownership, exec sponsorship….
Ensure consistency in project delivery.
Project/portfolio status reporting
Ensure timely and effective governance and resource allocation.
Reduce project failure rates.
Maximize the project throughput given constraints and project dependencies
Prioritize / select projects
Maximize the value delivered to the organization from the portfolio.
Lots of moving parts. Difficult organizational change. The need to “sell the value” at all levels and influence others. These are some of the career-limiting factors that the leadership of new PMOs face. No wonder half of them fail.
Ways to set up a new PMO
Most large organizations dive right on in, recruit a seasoned PMO – possibly supported by some good PMO consulting expertise – resource it and get going. With the right leadership and appropriate exec support, this can work well. These organizations are often at a higher maturity level to start with so adding a PMO is a natural extension.
Smaller project organizations, however, don’t always have the scale, vision or maturity to go-it-alone. They can, of course, bring in some consultants to help get things going and to augment their team on an ongoing basis. You can, in fact, find some really excellent PMO consultants via our partner pages.
There is another trend emerging, however. PMO-as-a-service.
Of course, there have been consultants who would come in and set up, and even run, your PMO for you since the building of Stonehenge (I believe that Arup program-managed that one with PWC overseeing compliance issues… or was that the London Cross-rail link?)
But PMO-aaS is different. It’s about leveraging economies of scale-and-learning. This is made possible by newer, online tools. What this does, if you believe the purveyors of these services, is increase the effectiveness of the PMO while, simultaneously, reducing costs.
In some cases, the business models are as innovative as the services they offer. For example, NJM Consulting is offering their PMOaaS priced on a per project, per day basis… and the offer seems amazingly good value – I’m talking a couple of coffees a day covering all the PMO services per project.
Oh, and that cost includes all the portfolio and project management software you need to get the job done.
All the software and the people in one place? At a low “as you eat” price? Sounds too good to be true…
All I can say is that we’ve teamed up with one such company (we supply the project prioritization / portfolio planning software within their offering), and I have to say that the quality of the people, their approach and their commitment is impressive.
So, I’d recommend, if you’re setting up a new PMO (or if your current PMO is struggling) that you take a look at both specialist PMO consultants AND at the new breed of PMOaaS providers.
Like those amateur house-builders, not bringing in the experts may cost much more in the long run.