What has the PMO ever done for us?

In the 1979 movie, The Life of Brian, the Monty Python crew all asked the question, “What have the Romans ever done for us?”

It seems that PMOs are getting the same treatment.

According to a research by ESI, 72% of PMOs are being called into question, mostly by senior management. Putting the most negative spin on this, it means that nearly ¾ of PMOs are simply not seen to be delivering the goods…

Ouch!

Also, highlighting the research from *PMI Pulse of the profession trends, the global performance of the industry has remained flat since 2012, there really hasn't been much improvement. 

So, what does all this mean? let’s unpack a little.

Why PMOs Fail?

With a staggering 25% of PMOs shut down after one year, 50% after two years and 75% after 3 years. This data has been taken from PMI Global Congress 2013 but it is still relevant even today. There are many reasons why PMOs fail but in this blog I'm going to focus on top three.

Top Three Reasons

The following are the top three reasons that PMOs are being questioned.

1) In 44% of cases, senior managers and other executives simply don’t perceive value from the PMO. This could be because the PMO isn’t delivering the right value to the organization or it could be because the value is not being presented well.

2) In 41% of cases, there was a perceived lack in maturity in projects / programs. Again, this could be a real problem or a perceptual one.

3) In 32% of cases, it’s the old chestnut… lack of executive sponsorship.

How to Tackle the Perception Problem?

In the rest of this blog, I’m going to look at the perception problem. Let’s assume that you, like the Romans in The Life of Brian, ARE adding value. In that case, we need to focus on how to make sure that value is visible.

Generally, execs hate any initiative that has poorly defined goals and that has no clear way to measure success… and if they don’t hear about an initiative, they kind of assume it’s not really adding value. These are normal human reactions, so be aware of them and act accordingly.

• Understand expectations of your executives: It’s important to have clear goals for the PMO, goals that reflect what execs want to see from you. These goals naturally come out of a good planning process (see next point), but relatively few PMOs take the time to consult with execs and to document the results.

• Engage in activities that add value for execs: Executives are busy. You might be doing an amazing job of training and supporting PMs at a tactical level, but the execs never see that work. On the other hand, picking the right projects in the first place is a very visible activity and PMOs should make sure they are supporting that prioritization and selection process. This will not only eliminate the waste from “doing poorly aligned projects” but will also show that you are actively adding value at the strategic level. Of course, I’m not suggesting the PMO should make portfolio selection decisions, but you can add value to the process.

• Measure your progress: This is kind of obvious, but if you don’t measure it, you can’t manage it… and you can’t blow your trumpet when you get it right. Good measurement will also support your drive to greater program/project maturity (showing where you need to focus) and it gives you a platform to quantify the value the PMO has delivered.

If you focus on these items, you’ll improve the perception of the PMO very quickly.

Project Prioritization Improves PMO Value

One reason PMOs often get a bad rap is that, despite all the frameworks and templates, projects still struggle: deadlines slip, costs mount, benefits evaporate. This means that the execs don't see the return on investment from your portfolio.

So, what should a PMO focus on if they want to fix this?

It turns out that most organizations try to run too many projects at once. When resources are spread thin, multitasking kills efficiency and progress stalls. The solution isn’t “more project management,” it’s better portfolio management. In other words prioritize hard, start fewer projects, finish them faster, then move on to the next project... rinse and repeat! 

This isn’t just theory. The empirical research is crystal clear:

• A typical portfolio has 20% of projects that simply shouldn't be there - they are waste. Good prioritization lets you cut that waste... let's assume we cut it in half - that's a 10% boost in ROI.
• Organizations that do portfolio management well see a 29–38% improvement in benefits realization. Let's call it 35% for the purposes of this article.
• Using your prioritization to sequence your work so that your people aren't overloaded leads to 30–50% faster cycle times across industries - so you finish more projects. Let's say that's another 35% boost to ROI.

Put those together and you’re looking at roughly a 100% increase in strategic value delivered - that is a doubling the strategic ROI on your project investment without adding a single extra resource.

That'll get the exec's attention!

What makes that improvement possible? Prioritizing projects the right way, matching demand to real capacity, and ruthlessly sequencing projects to avoid resource overload.

Learn more

If you’d like to learn more about how to prioritize projects like a pro, this blog is a great place to start: How to Prioritize Projects.

To see more detail on where these "double ROI" numbers come from, check out this blog.