What is My Project Management Office Doing Wrong?
The project management office (PMO) is a common organizational feature among modern businesses. Eighty-five percent of enterprises have PMOs, according to researchers for the project management software provider PM Solutions. Of those companies that do not have PMOs, 30 percent plan to establish them over the next year.
Organized and well-resourced PMOs can drastically improve operations, allowing companies to execute improvement strategies that are on time and under budget. However, few PMOs perform at this level. A mere 25 percent of PMOs facilitate improvements to productivity, and only one-third consistently deliver under budget. Why? Because many PMOs suffer from functional and structural issues that hinder their performance.
Let’s look at a few common PMO issues and how to address them:
Lack of operational identity
Businesses often form Project Management Offices for one of two reasons:
- Executive leaders have requested the formation of a permanent PM team.
- An operational issue warrants an internal team of problem-solvers.
In either scenario, the resulting PMO can encounter roadblocks as they try to find a clear identity, the Project Management Institute reported. PMOs created at the behest of business leaders often struggle to pinpoint their purpose. At the same time, PMOs established to address one-off problems tend to be slightly more productive, as they at least come into existence with a clear objective in mind. But once they tackle the objective they were created to achieve, finding new purpose can be difficult.
PMOs can avoid this issue by crafting an organizational identity upon formation. For instance, some PMOs use responsive processes and specialize in solving reported problems. Others take a more proactive approach by staffing multiple project managers and technical executors who can actively pinpoint and iron out problem areas. PMOs that work to cultivate actionable identities are more likely to find sustainable success than those that function with seemingly little direction. But organizations should refrain from building PMOs with overly rigid missions. Agility is essential in today’s operational climate, and a PMO that can adapt is far more likely to face new challenges confidently and correctly.
Ineffective performance metrics
In order to achieve success, PMOs must know what excellent performance on the shop floor actually looks like. Metrics are, of course, responsible for painting a full picture.
Unfortunately, few seem to work off such measurements. Analysts for PM Solutions found that more than 40 percent of PMOs struggle to demonstrate their value, which speaks the weakness of their reporting structures. The absence of ironclad performance data can lead to resourcing issues and distrust among executive and operations leaders. This makes it more difficult for PMOs to execute, even without the context data provides.
The root of this problem lies in the actual mechanics of tracking performance. Many PMOs rely on manual reporting practices powered by unwieldy spreadsheets. This variable alone makes it difficult for these offices to collect and analyze actionable data, leaving many to give up on such efforts entirely. Enterprises can overcome this issue by outfitting their PMOs with back-end solutions capable of gathering real-time performance insights that map to specific internal initiatives.
Fear of failure
PMOs pursue long-term performance excellence. As a result, project managers are always searching for projects and cultivating processes meant to maximize the likelihood of success and, ultimately, revenue. But this desire to demonstrate value can actually cause dysfunction within PMOs. PM departments that constantly look for wins may avoid innovative methodologies that could lay the groundwork for operational transformation in favor of more traditional, battle-tested solutions.
Today, according to PMI, 15 percent of the programs managed through PMOs result in failure. This figure indicates that many PMOs put timeliness and budget above overarching business performance by submitting unambitious project plans. Sure, they’re likely to be executed on time and under budget but will have little impact on the operation when all is said and done. PMOs must be empowered to break free from convention and pursue innovative methods for improving their businesses.
In the end, enterprises that overcome these challenges can expect to create powerful PMOs that lead internal initiatives, realize goals, and catalyze real change.
Here at USC Consulting Group, we’ve been working with our partners across various industries for five decades, lending them operational insights that bolster shop-floor functionality and facilitate financial success. Does your PMO lack direction, struggle with its key performance indicators, or feel trapped in a vicious cycle of boilerplate solutions to complex and unique problems? Connect with us today to learn more about our work and how we can help your PMO reach its full potential.