There should be no question
that your organization will find value in good, sound project management
practices. In fact, the larger the project is, the more project management
becomes a requirement for success, not just a value-adding proposition.
In general, the value of a
common project management process includes:
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Reduced cycle time
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Reduced delivery costs
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Improved quality of project deliverables
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Early
identification and proactive management of project issues and risks
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Better containment and management of project
scope
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More
opportunities to leverage and reuse knowledge
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Improved accuracy of estimates
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Better
communication with clients and stakeholders
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Improved perceptions of your organization by your clients
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Improved people and resource management
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Reduced time to get up to speed on new projects
Project management processes
are applied at a project level. Since we assume that the project itself has
some business value, you should be able to show that project management
processes have value if they help you to complete the project within
expectations. On the surface, you might think that if project management is
good, then there must be value associated with a group that will help
implement project management processes. However, not all companies view it
this way, and a PMO does not have the same value proposition for every
company. For one thing, the PMO does not manage projects, and so does not
have a direct project connection. It is indirect. The value proposition for
a PMO is much looser and more subjective.
A PMO costs money to staff
and to run. In many respects, a PMO reflects an overhead investment. The
hope is that the money and time invested in the PMO will be more than saved
by delivering projects better, faster and cheaper across the entire
organization. In fact, the value is gained by not only helping specific
projects meet their expectations, but by implementing processes and
practices that allow every project within the organization to be delivered
better, faster and cheaper.
Most organizations will find
an overall cost savings associated with implementing a PMO (versus the cost
savings associated with project work). However, some organizations may find
that the savings in project delivery costs are made up for in the actual
incremental cost to implement and run the PMO. In this case, the other
benefits of the PMO should more than justify the value proposition. This
value includes helping projects complete within their estimated deadlines
and budgets, and generally delivering faster than they did in the past. If
this value proposition is fine for your PMO, you will still be delivering a
lot of value to the organization. However if you find that the cost savings
on projects are offset by the cost of the PMO, and this is not acceptable,
it may point out a need to reduce the size of the PMO to make this value
proposition work.
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An organization typically
needs to be of a certain size before the overhead associated with a PMO
becomes beneficial. At one extreme, if you only have one project per year,
you do not need a PMO since it is much less expensive to provide project
management training and support to the one project manager. If you have a
handful of projects every year, you may still be able to get by with the few
project managers collaborating and agreeing to a certain set of common
processes and templates. |
Now, let's go to the other
extreme. Let's say you have a large, diverse organization that delivers
hundreds (or thousands) of projects per year. In this environment, there may
be dozens or hundreds of project managers, each with varying levels of skill
and experience. A lack of common processes results in project managers and
team members being required to learn new processes as they move from project
to project. In addition, no one has any idea whether the company is
successfully delivering projects in general, and no one knows what anyone
else is doing. In this environment, a centralized PMO makes great sense to
ensure that all project managers have a core set of project management
skills, common processes and templates. The PMO also acts as the owner of
the project management methodology, and the PMO acts as a support
organization that project managers can utilize for project management
assistance. In addition, the PMO can serve as a place for providing an
organization-wide view of the status of all projects and can report on the
improvements being made to project delivery capabilities over time.
Of course, most organizations
are somewhere in the middle. They have more than a couple projects per year,
but not hundreds. Each organization needs to look at the number of projects
executed per year and make a determination of whether the projects were
completed successfully. This internal analysis starts with gaining an
understanding of how you execute projects today, how you would rather
execute projects in the future, and how best to get to this future state. If
your future state vision is close to your current state, there may not be a
reason to make any changes. However, if you are not where you want to be, a
PMO may be the organizational mechanism to get to this desired state. There
are many options to look at for implementing a PMO. You want to do so in a
way that ensures that the group and their mission make sense for your
organization.
In addition, one obvious
motivating factor for implementing a PMO is the amount of pain that the
organization feels over failed projects. If most projects end successfully
without a PMO, there may not be a strong motivating factor to build one.
However, if there is a lot of pain associated with project delivery, the
organization will be much more motivated to invest resources in a PMO to
turn the situation around.
At a high level, a PMO is
increasingly being viewed as an essential component that enables the success
of projects, and hence, the future success of the entire organization. At a
more tactical level, the value provided by a PMO is summarized below.
Although PMOs can be established to provide a narrow or broad set of
services, this list includes many of the common responsibilities a full PMO
would perform.
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The
PMO establishes and deploys a common set of project management processes
and templates, which saves each project manager or organization from
having to create these on their own. These reusable project management
components help projects start-up more quickly and with much less effort.
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The
PMO builds the methodology and updates it as needed to account for
improvements and best practices. Therefore, as new or revised processes
and templates are made available, the PMO deploys them consistently to the
organization.
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The
PMO facilitates improved project team communication by having common
processes, deliverables, and terminology. There is less misunderstanding
and confusion within the organization if everyone uses the same language
and terminology for project related work.
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The
PMO sets up and supports a common repository so that prior project
management deliverables can be candidates for reuse by similar projects,
further reducing project start-up time.
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The
PMO provides training (internal or through vendors) to build core project
management competencies and a common set of experiences. If the training
is delivered by the PMO, there is a further reduction in overall training
costs paid to outside vendors.
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The
PMO delivers project management coaching services to keep projects from
getting into trouble. Projects at risk can also be coached to ensure that
they do not get any worse.
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The
PMO tracks basic information on the current status of all projects in the
organization and provides project visibility to management in a common and
consistent manner.
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The
PMO tracks organization-wide metrics on the state of project management,
project delivery and the value being provided to the business by project
management in general, and the PMO specifically.
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The
PMO acts as the overall advocate for project management to the
organization. This includes educating and selling management and team
members on the value gained through the use of consistent project
management processes.
