June 23, 2022
General
Libby Marks

How to Improve PMO Performance Before It's Too Late

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? 

Why do PMOs get canceled?

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:

  • The organization didn’t need a PMO in the first place
  • The PMO wasn’t set up properly in the beginning
  • The PMO is no longer fit for purpose now
  • Lack - or loss of - senior support
  • Lack - or loss of - strategic alignment
  • Lack of credibility to ensure compliance 
  • Overly bureaucratic processes 
  • Poor resource management

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.  

How do you know your PMO is underperforming?

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: 

  • Overall improvements in project performance
  • Implementing and rolling out tools and methodologies to an agreed schedule
  • Meeting specific metrics for project compliance or customer satisfaction
  • Delivering training and upskilling PMs to an agreed level 
  • Reducing project failures and cancellations 

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.

8 ways to improve PMO performance

1. Benchmark against PMO best practices

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. 

2. Develop a value creation mindset

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. 

3. Change with the times

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.

4. Redesign as an EPMO

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:

  • align their initiatives to the strategic objectives of the organization
  • inform organization-wide capacity planning and resource utilization
  • optimize a cross-departmental project portfolio to deliver highest value

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. 

5. Secure C-suite support

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.

  • Close interaction with the C-suite helps EPMOs align their initiatives to organizational strategy 
  • EPMO reporting into the C-suite helps them make better decisions on critical issues like resource and capacity planning
  • Having support from the C-suite gives the EPMO authority and credibility to drive through change 
  • The EPMO has greater visibility to the C-suite, meaning its impact and expertise is more likely to be recognized and acted up 

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!

6. Improve resource management 

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:

  • you keep work manageable for your people and avoid the costs of staff burnout and churn
  • you’re not overspending on staffing because HR have sufficient runway to recruit for a project rather than relying on costing short-term contractors
  • you don’t end up using a senior developer to do a junior role, just because that’s who’s available at the time

Resource management software can provide the program and portfolio overview needed to optimize resource allocation and utilization

7. Invest in your project managers

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:

  • providing in-house training, coaching, and mentoring
  • promoting a continuous learning culture
  • encourage peer-to-peer communities of practice and knowledge sharing 
  • recognize and reward ‘soft’ skill development in performance reviews

8. Make data-informed decisions 

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:

  • A bird’s eye overview of all projects and their interdependencies 
  • Granular insights into individual projects and resources
  • The ability to explore different scenarios and their impact on the organization
  • Resource allocation and utilization tools that keep projects and people happy
  • Real-time data for agile and informed decision-making 
  • An intuitive dashboard that makes reporting a breeze  

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