The future of the PMO – a strategic move
John Edmonds – Senior Architect, PPM, PeopleCert
How important is a PMO to project, programme and portfolio success in organisations?
Figures from McKinsey show that organizations with a PMO are 2.5 times more likely to achieve their strategic goals than one without. Other sources suggest that having a PMO means project failure risk is 30% lower and return on project investment 15% higher.
Despite this, PMOs go in cycles of being in, or out, of favour.
However, recent project management conference discussions and online forums point to a current rise in PMOs. That is because, I believe, they can be incredibly important.
The really successful organizations have offices for all three levels of change initiatives – project, programme and portfolio – which is a good reason why PeopleCert has the P3O certification, plus guidance at each of three levels, to improve best practice across each of them.
Overall, PMOs should provide a range of services to project, programme and portfolio professionals that align with organizational needs. And with new developments such as AI and other trends in organizational change, these services must adapt accordingly.
The historical effectiveness of PMOs
Why do PMOs get shut down when – as the statistics show – their value is proven?
Sometimes, a PMO doesn’t always demonstrate the benefits it delivers and, if an organization is going through difficulties, it can be an easy target to terminate.
In other cases, the PMO has failed to change in line with the organization. For example, if the PMO considers its role to be about controlling documentation, logging time, budgets, etc – essentially, doing administration – it can get left behind as the wider enterprise advances.
Being known as the “document police” is not a way to establish your value. That’s why a major trend today is for PMOs to become far more strategic in their work.
Three key PMO trends
- AI
Some traditional PMO tasks – number crunching, basic planning, reporting and forecasting – can be done today with AI. This means the PMO needs to have a level of expertise in using AI, and that needs investment, time and learning.
- Soft skills
For example, change management, is about helping people going through change as the result of a project – something now very much embedded in the new PRINCE2 7 guidance. PMOs can lead the way in developing greater involvement with the people-centric side of things, providing guidance for projects and organizations undertaking change.
- The strategic PMO
When operating at a portfolio level in an organization, the PMO can offer guidance to senior management about, for example, the capacity to take on new projects, which projects are right to pursue, which will support sustainability, etc.
Project managers will, naturally, tend to be project focused and may not always see the bigger picture or have a relationship with top management, especially in larger organisations. Therefore, the PMO can fill that role; moving beyond reporting and policing standards to supporting strategy, as well as talking tactically to the project management and delivery teams.
On that point, PMOs can support professional project managers by allowing them to operate in the best way they can, based on their knowledge and experience. Meanwhile, they can also provide a different type of support to the “occasional project manager”, as companies become more project centred. This support may include tactical help – e.g. planning and risk management.
The PMO and best practice
With its expertise in various project approaches, the PMO can give intelligent advice to its organization: not just about, for example, the benefit of using a method like PRINCE2 7, but demonstrating how to use it most effectively.
The concept of tailoring the method to the needs of the business needs explaining and the PMO is in the position to understand what that really means, to reflect on lessons learned from previous projects and turn that knowledge into ever-increasing maturity of practice.