Project Management Offices (PMOs) have become a fixture in many organizations. According to the 2012 State of the PMO Study, 87% of organizations surveyed have a PMO, up from 47% in 2000. Although mid-size and large companies are more likely to have a PMO than small companies, the biggest growth, by far, was in small companies – 73% of small firms now have PMOs and over 90% of mid-size and large companies have them.
Still, people question their value and ask, Does having a PMO matter?
The statistics say yes. According to the 2012 State of the PMO study, PMOs directly contribute to the following performance improvements: a 25% increase in projects delivered under budget, a 31% increase in customer satisfaction, a 39% improvement in projects aligned with objectives, a 15% cost savings per project, and a 30% decrease in failed projects.
Experience also says yes. A 2012 PMI White Paper described multiple PMO success stories. In one case study, a company shifted the focus of its PMO from a process orientation to an outcome orientation. The PMO now focuses on working with organizational units as they launch projects, requiring them to build a business case and complete a scorecard to demonstrate how the project aligns with corporate strategy. The reorganized PMO was able to triple the number of projects that delivered on organizational strategy. In another case study, an organization was able to reduce project planning time by 75% through standardizing and leveraging common project plans defined by the PMO.
Having a PMO CAN matter, but simply having a PMO is not a silver bullet. Implementing an idealized methodology that isn’t tailored to an organization’s needs and cultures won’t suddenly or magically solve all problems. To meet its objective of improving the likelihood of project success, the PMO must gain maturity and acceptance within the organization. It must become more than another structure or process. It must become focused on continuous process improvement and proactive management of the project portfolio. Keys to achieving this level of maturity are strong executive sponsorship, tailoring the PMO to solve practical, real-world problems within the organization, and actively measuring PMO and project success.
So if you are an organization that struggles to consistently deliver business critical projects do you have a PMO? If you do, is it as effective as it could be? Maybe it is time to consider the benefits of a PMO assessment and reap the rewards that a highly functioning PMO can bring to your organization.