Saturday, January 19, 2013

An Interesting Article on PMOs

Recently, a colleague forwarded an article to me that appeared on Information Week. The article title was "Project Management Offices: A Waste of Money?" (November, 12, 2012). The author, Jonathan Feldman (of whom I corresponed with and spoken to) suggests
that establishing a Project/Program Management Office (PMO) carries with it great risks. Among those risks are increased IT costs, as well as a lack of significant improvement in processes. Jonathan was reporting on a study from the Hackett Group that looked at more than 200 organizations. Jonathan was kind enough to agree to a discussion and when we spoke about this, I stated that I agree with the study findings that if a PMO does not align itself with the strategic vision and values of the organization, it may very well fail its purpose.
Our discussion 

When we finally had a chance to speak at greater length, Jonathan mentioned several findings from the study that opened my eyes.

- The average lifespan of a PMO is under four years:
This is a shocking statistic, but the more I thought about it, the more it made sense. A PMO is not a silver bullet that delivers positive results just because an organization puts one in place. Similar to any strategic initiative, it must be well defined and thought out. If it is treated like a fad, then it will become a fad and fade out.
- My next question was "is Agile better suited for smaller organizations:"
Jonathan suggested, based on study findings, that this is a resounding NO. I will admit in full disclosure that I have not worked in a truly Agile PM environment. I will also admit that I was shocked that this study found that in some cases, implementing an Agile process produces better results than implementing a PMO. Jonathan stated that the reason why Agile may succeed where a PMO does not is because there is less overhead.
- Our next agreement was that some organizations plan to fail:
One of the things that Jonathan and I agreed on right away is that one reason Information Technology (IT) PMOs may fail is because in PM practices, there is planning and forecasting for a period of time that is unrealistic to plan and forecast properly. In other words, some PMOs engender lying because forecasting too long for a specific implementation may be unrealistic.

Business driven, nothing more, nothing less
Even though I have stated this before before, it is worth repeating. The PMO must be focused on strategic projects that are driven by the executive office: the C-Level Executive Suite, or as Jonathan put it, “the C-Suite.” In other words, projects must be business driven. That is why I am a proponent that a PMO should be an enterprise-driven group and could have projects that are not IT projects.  Whether their purpose is to improve the core business of the organization, or to enhance a product, or to improve a supporting process in a business, projects must be aligned with the strategy of the organization. In his article, Jonathan mentions that if a PMO is put in place and is only given lip service from the C-Suite, then the PMO is doomed for failure, as is anything that an organization implements without the correct support or resources.
                                                                A paradigm shift?

I hope that you understand that I still believe that a PMO that is properly implemented and supported by senior management can be successful. However, like any trend, it can be implemented for the wrong reasons, and have the wrong individuals running it. A properly supported and implemented PMO can drive an organization to excellence and have the organization speak as one voice to its clients. I am convinced that the PMO structure is a successful business strategy.
I am open to discussion at any time on these blogs or anything else related to project management you would like to explore. If you would like to comment about this blog, please do so by posting on this blog or by responding in an email at Benny A. Recine.You may inspire a blog article. I look forward to your comments.

1 comment:

  1. I agree with your key point in your blog summary. The PMO needs to be well supported by senior management. At my former company, it wasn't.

    My company started a PMO in July 2011 and offered me the Senior PM roll. They said they were going to hire a PMO Director. At the time, I was very pleased with the opportunity.

    Shortly after I started in the PMO, there was a management reorg. The Director position was put on hold. Project stakeholders and program managers did not see value in the PMO. In mid-February 2012, the PMO was eliminated.