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Today, many companies have active projects that are over budget, behind schedule, and experiencing excessive scope creep. According to a 2004 PriceWaterhouseCoopers survey of executives and project managers from 200 companies in 30 countries, only 2.5% of these companies completed 100% of their projects on time, within budget, and within the originally defined scope.
Based on this track record, how can an organization have confidence that their projects will succeed? The solution may be a Project Management Office (PMO). In recent years, the PMO has been publicized as the most effective business solution for managing projects and controlling change necessary to compete in today’s marketplace. This article seeks to provide a general understanding of the Project Management Office, expected organizational benefits, common barriers to implementation, and best practices for ensuring a successful PMO implementation.
The Need for a Project Management Office
Gartner defines a PMO as “a center of expertise that provides organizational focus on improving the management of projects, programs and portfolios”. It can manifest itself in a wide variety of ways, ranging from a suite of best practices to a more formal enterprise-wide organizational structure with sophisticated project governance and a focus on continuous process improvement. As stated in a previous SEI Quarterly Communication article, entitled Making Project Management a Strategic Advantage, typical PMO duties consist of:
- Creating standard tools, templates, processes, and mechanisms to monitor the overall health of projects and process performance
- Managing resource allocations
- Developing tracking and reporting mechanisms for business and project metrics
- Incorporating rigor into the project prioritization and management processes by leveraging historical metrics and lessons learned
The impetus for the creation of a PMO often originates from the failure of a critical project and the resulting realization that there is a need to improve project delivery. It could also be fueled by market demands like a firm’s rapid growth or anticipated mergers and acquisitions. In any event, a PMO may be the appropriate business solution if an organization has any of the following warning signs:
- Projects are misaligned with strategic goals
- Stakeholder expectations are not formally managed and are often misunderstood
- Projects often do not meet the assigned completion date
- Projects run over budget
- Project management processes, reporting, and metrics are inconsistent across projects