Is your Project Management Office underperforming or under threat? Here are 8 ways to improve PMO performance before it flops.
If your Project Management Office is underperforming, it may be at risk of being discontinued. And that would be a shame when you consider the many business benefits of having a PMO - including better project outcomes, higher revenue, and increased customer satisfaction.
Rather than abandon the PMO model altogether, it makes sense for organizations to try to improve PMO performance first. But how do you know if your PMO is failing - and how do you turn it around right on cue?
Project Management Offices get canceled when they fail - or are perceived to fail - to deliver value to their organization. There can be lots of reasons for this:
Sadly, once a PMO starts to fail, it can enter a terminal tailspin. If the PMO isn’t delivering better project outcomes, then confidence, credibility, and compliance will drop. This can lead to further deterioration in project results. And that makes the PMO look even less tenable.
To have the best chance of turning around a failing PMO, management needs to monitor performance and take action as soon as the problem becomes apparent.
PMO performance should be measured through appropriate KPIs. These KPIs should measure the performance of the Project Management Office itself, not just individual project outcomes.
KPIs for PMOs might include:
If your PMO regularly misses these targets - or project compliance with budget, schedule, and quality standards is low - it’s a sure sign that something needs to change. Here are eight ways to improve your PMO performance.
The first step is to assess the current state of your PMO's performance. You can use existing research to benchmark your organization against comparators.
The PMI’s PMO Maturity Scale is a rich source of PMO best practices. It uses more than 20 activities to benchmark the top-performing PMOs and shows how they leverage these activities to create value in their organization. Start with a survey of what your PMO does and how that measures up to the top 10 percent. We've got the list of PMO best practices explained here:
PMO Best Practices: What Sets the Best PMOs from the Rest?
You should also compare the KPIs and activities of your PMO to your organizational strategy. Strategic alignment is essential for PMO success. Remember, just because something made sense when the PMO was set up, doesn’t mean it makes sense now.
If you find room for improvement, you should develop a roadmap to improve PMO practices, processes, and impact. Which PMO best practices are you going to introduce? What will this look like in practice? What capacity and capability will you need to implement change?
This will depend on the weaknesses your audit has uncovered - as well as your organizational goals for the future. For example, cost efficiency, compliance, speed of delivery, project scoping, customer satisfaction, strategic alignment, etc.
Top-performing PMOs regularly measure their performance to ensure they are fulfilling their purpose. Using the information from your initial audit as a benchmark, review improvements - such as fewer project failures, more projects delivered on or under budget, higher client satisfaction, etc.
Not only so you can be sure your PMO is improving but so you can showcase the improvements and start to rebuild trust and credibility within the organization.
The true purpose of a Project Management Office - indeed, any business function - is to create value for the organization. If your PMO is underperforming, it might be because they don't see the bigger picture.
PMOs that think in purely operational terms - concerning themselves with on-the-ground project delivery, governance, and compliance - miss opportunities to act as strategic partners and deliver additional benefits to the business.
Head over to our article on How to set up a successful PMO for tips on how to ensure alignment between your PMO and your organizational strategy.
According to Gartner PMO best practices, an effective PMO regularly reviews and re-evaluates how it aligns with the current needs of the business.
They cite the example of a PMO being formed during an economic downturn, with cost reduction and cost efficiency the primary drivers. In a more favorable economic climate, the same business may be less concerned with saving money and more interested in digital transformation and faster service delivery. As a result, the PMO's structure and staffing may no longer be fit for purpose.
To continue to add value to an organization, a PMO needs to adjust its approach and activities to best support the current direction of travel.
The majority of high-performing PMOs are EPMOs - Enterprise Project Management Offices. This means they sit high in the corporate structure - with an organization-wide overview of projects and a direct line to the C-suite.
From this position, the PMO is better placed to:
If your PMO is underperforming, it may not have the necessary overview, insights, and information it needs to deliver. Moving it higher in the corporate structure and redesigning it as an EPMO could help.
73% of top PMOs have a C-suite-level role that represents the PMO, compared to 47% of organizations overall, according to PMI research. Getting senior buy-in helps PMO performance in several ways - some of which you might not expect.
The PMI describes this relationship as ‘a piece of the puzzle that is missing for the majority of PMOs globally’ despite being essential for resource allocation and project alignment. If your PMO is underperforming, it could be time to make more friends in high places!
Effective resource management is at the heart of project management and PMO best practice. In project-based businesses, your people are often your biggest investment. Leveraging the most value from your resources - getting them working to optimum capacity where they’re neither overstretched nor underutilized - can improve overall project performance while controlling costs. For example, it ensures:
Resource management software can provide the program and portfolio overview needed to optimize resource allocation and utilization.
Top-performing PMOs invest in and develop their project managers to overcome the challenge of recruiting PMs with the skills for success. According to the Project Management Institute, relationship building, collaborative leadership, and strategic capabilities are most important in improving decisions, outcomes, and team performance. But their research shows that one in three organizations struggle to find project managers with these sought-after capabilities.
They’ve found that the top-performing PMOs are committed to developing these skills in their PMs to secure the best project outcomes. If your PMO wants to improve performance and outcomes, you could consider:
Access to timely, actionable, cross-departmental data isn't just important for the C-suite. It's also essential for decision-makers within the PMO.
Having information at their fingertips can help PMO professionals make fast, well-informed decisions without having to wade through acres of spreadsheets and pivot tables.
For example, modeling different scenarios to analyze the best project combination to benefit the business. Or reviewing resource allocation and utilization to find opportunities for improvement.
A key way to improve PMO performance is to equip them with the software they need to aggregate, interrogate and easily interpret project data - for example, via intuitive dashboards like the ones you find in Runn.
Runn provides PMOs with invaluable tools to improve their performance including:
One of the most popular estimating techniques is analogous estimating. It involves using data from previous, similar projects to estimate activity durations on your project. Learn what it's all about.
Without people, our projects would go nowhere. That's why it's so important to avoid employee overload, find the right balance, and deliver your projects sustainably.