Do you know that an extremely large number of companies they don’t either have a PMO or what they call PM Office within their organization doesn’t really qualify to be a real industry standard PMO, in most cases not even close. From our PMO deployment experiences, we see companies having so called PMO, we saw these to be isolated department within the company that either just works on template creation, some process improvement efforts or introducing new project management software and interfaces that rest of the organization ignores outright. Not only that but there is normally a constant friction between PMO department and the project, program and portfolio managers. That doesn’t help the organization’s bottom line in any way.

There are also uprising and fast growing organizations with large part of their business activities involve project and program deliveries. And they didn’t consider PMO setup till they realized that they have problems of diluted business value by the waste emerging from the project management space. There are personality based deliveries rather than process based deliveries, entailing inconsistent outcomes.

Each of these organizations whether they have or don’t have fully functional PMO, sooner or later they realize that they need to do something to improve performances of projects, programs and portfolios that can enable faster growth of the organization. At some point they observe that they need some mechanism in place that can standardize deliveries and keep improvising the processes for higher levels of stability and performance deliveries.

But then question is, “Wouldn’t the PMO department itself will cost?”. Off course. If PMO department doesn’t exist, all that cost doesn’t exist too. When there is cost there should be higher level of benefits that can justify the cost. So the Benefits to Cost Ratio should be higher for a defined period. This period can change from organization to organization based on their current organizational project management maturity. The benefits of PMO operations can be seen in terms of higher profit margins from projects and programs as well as higher year on year ROI from the portfolio. Another consideration is also payback period. How quickly the benefits can surpass the PMO deployment costs to start with. And beyond that how much benefits the ongoing PMO operations deliver compared to the running PMO costs? We have seen that PMO department from many companies struggle on both fronts. On one side project, program, portfolio managers don’t want to change the way PMO wants and hence resist PMO existence altogether. And on other hand PMO struggles to justify the benefits of their running costs. These circumstances force them to manipulate data and numbers to keep PMO setup alive and keep their jobs too.

So looking at this situation, we can say that it is good to have PMO setup in any organization as much as the PMO setup costs can be recovered quickly by the benefits of PMO setup and also the quality of PMO setup should be higher enough and PMO organization scale should be optimized enough to justify ongoing PMO costs. We also have worked with some companies where PMO organization was setup unnecessarily large that PMO costs were unjustifiable compared to minimal benefits that could be accurately linked to the PMO existence.

 If PMO is not going to be able to justify it’s setup and running costs then it is better not to think about PMO setup because otherwise, the organizational business value will be reduced by PMO existence rather than increased. And this is not only because of PMO costs, but also PMO can potentially worsen performance of the projects, programs and portfolios leading to overall organizational performance decrease. And there are a large number of ways PMO can damage organization spirit. Something you will find in another posts on PMOAid.com

There are a large number of companies out there that deliver PMO based on their standard delivery. They deliver quickly and disappear. Organization where PMO was setup doesn’t get idea quickly about PMO deficiencies and impact to the rest of the organization. This happens because PMO deployed was not a fit to the organization where it was structured. It is like delivering child’s T-Shirt to an oversize elderly or an oversize elderly’s T-Shirt to a child. As you can see benefits are not delivered by the T-Shirt purchased and hence benefits can’t sustain.

Quick note: For the purpose of this post, PMO represents EPMO (Enterprise wide Project Management Office), EP3MO (Enterprise wide Project/Program/Portfolio Management Office), OPMO (Organizational Project Management Office) etc….

 Read our other posts to learn everything about good and bad PMOs and how you can improvise your organization’s PMO to above industry standard PMO.

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