A 2012 report from PM Solutions indicated that 87% of surveyed organizations have a project management office in place compared to only 47% in a similar study performed in 2000. Yet PMI reported in a study that as many as 68% of all projects fail to some degree. And as for PMOs, I have personally worked in or lead PMOs for four different organizations. One company experienced utter PMO failure…twice…another kept turning over their PMO directors in a never-ending quest for some project management ‘better’ practices, and a third floundered miserably. The only one that didn’t fail was the one I was leading, though unfortunately it was short-lived as the organization itself closed up shop.
On the other hand...really...is this a necessary question for those that do need a PMO? Project offices already have a pretty good pre-defined role in our minds, at least in my opinion. It’s full of qualified (experienced, intermediate, and new) project managers, usually a PMO director who leads the organization, some laid out processes, processes and templates, and space in the organization that is recognized as the go-to office for any project ideas, customer initiatives, etc. that need to be lead by talented project professionals.
Does that sound like I’ve pretty much defined it – in highly general terms, of course? Please feel free to comment and add your own descriptions, definitions and terms here, as this is the purpose of the article.
But what about more? Who’s championing it? How is it funded? Does it handle internal projects, external projects for customers of the organization, and is it led only by the PMO director or is there someone further up who is guiding it on an ongoing basis?
External projects and internal projects...they are different but equal. Obviously one is more visible than the other, but I never consider them to be less important. That may be up to senior management or the customer on how it gets prioritized, but a project is a project. All customers are important. The internal project usually has to go through less red tape…most of the time. Funding is always an issue. Most PMOs I’ve worked in or helped start have operated as profit centers and bill out their resources to internal or external clients the same – though rates may be different. That’s another area that needs to be considered – how does the PMO get funded? And what happens if it’s not making enough money? What happens then...are there cut backs in services? Take on fewer projects? Layoff project managers? Up prices and hourly rates of the project management resources charged out on each project? Layoffs? Many financial things to consider.
Who should run the show? Usually this is a PMO director. But it’s not out of the question that it could really be someone else. I’ve had two colleagues write about the concept of a C-level project champion/leader called a CPO. Not C3PO (of Star Wars fame), but CPO as in Chief Project Officer or Chief Program Officer. I personally think it’s a great idea as one of the key ingredients – in my opinion – of PMO success is executive sponsorship/buy-in. Having a C-level PM leader all but guarantees that executive level buy-in.
Don't forget the money aspect – a PMO is not free. Finally, if your PMO is not operating at as a profit center, who is funding it? Let’s say you have six project managers and a PMO director. That’s likely at least $500,000 - $600,000 in salaries – even in today’s cheapened marketplace – that need to be covered. Where is this coming from? Plus travel and training expenses, benefits, etc. Who’s paying for this? The easiest route to take is just bill them back on projects to whoever the project is for, but I’m certain not all organizations do that. How do you cover these PMO expenses?
Summary / call for input
From my standpoint, if your organization is of any decent size and is running “projects”, then it probably should have a PMO.
What about your organization? What role – if the PMO exists – is it playing in your organization? Not just from a face for project leadership, but also in the leadership and profitability of the organization. Please share your opinions or how your company is handling this situation and let’s discuss further.