“Is a PMO necessary for Successful Project Management?” was the topic of the 19th hangout of the Sensible Project Manager Hangout Community. In this hangout Mark Phillipy was joined by Daniel Kushner from Chicago Illinois in the US and Paul Naybour from the UK. Daniel suggested the topic for this hangout due to the preparation he is currently doing to implement a PMO in his organization. Paul & Mark have experience with both setting up a PMO and worked in PMO environments. The conversation covered the value of a project management organization along with the advantages and disadvantages of a PMO. We also discussed the preparations that Daniel is going through in preparation for implementing their Project Management Office.
First of all, what is a Project Management Office? PMI defines a PMO as “a management structure that standardizes the project-related governance processes and facilitates the sharing of resources, methodologies, tools, and techniques”. In reality a PMO can look very different depending on the degree of control and influence it has within the organization. PMI identifies three types of PMO structures in an organization they are Supportive, Controlling, or Directive. We discussed these three levels of structure and their effect on an organization.
During the hangout we discussed the advantages and disadvantages of having a PMO in an organization. As a result of the discussion we all agree that there is a lot of benefit to having a PMO, however it is important to understand what problems you are trying to solve with its implementation. Once you understand the value an organization will get from a PMO, you can then establish one that is appropriately sized and provides the value to the customer. We also agreed that when implementing a PMO it is important to be careful to not allow the PMO to cause more problems with its implementation.
The purpose of this hangout was to provide some honest thoughts to help you assess if a PMO might be right for your organization. In addition to watching the hangout, you can review the list of advantages and disadvantages below in this post. Feel free to add to this list or share it with others to help us improve this list as a resource for those who are entertaining a PMO for their organization.
Advantages of a Project Management Office (PMO's)
These are advantages to having a PMO in an organization.
The PMO will standardize the project management processes for the organization. This standardization should result in improved projects.
As the PMO gets a handle on the organizations portfolio, projects can be prioritized based on their value to the business.
Improve Predictability of Project Delivery
With improved and repeatable processes, projects should be able to be delivered in a more predictable manner.
Improve Project Success Rate
According to the Standish CHAOS Report in 2009, operating an established PMO is one of the top three reasons that drives successful project delivery.
Improved Management of Resource Allocations
The organization will have better control over the management of its project resources. In theory resources should be able to be more fully allocated.
Improved Project Metrics
Measuring the progress of projects will be improved as the PMO identifies the proper metrics.
Disadvantages of a Project Management Office (PMO's)
These are disadvantages to having a PMO in an organization.
Increased Overhead on Projects
A PMO adds additional overhead to a project which can increase the cost of the project. The impact can be small or large dependent on any process benefits that are realized on a project that offset the additional overhead.
PMO's often feel like there is a lot of bureaucracy required for a project manager to wade through to successfully deliver a project.
Slows Project Delivery
Due to the additional overhead and potential bureaucracy, projects can take longer to deliver.
Can be too Costly for Smaller Organizations
There is a cost to implementing and maintaining a PMO. This cost can be overwhelming for an organization.
Tough to Implement
Implementing a new PMO could be difficult dependent on an organizations culture and ability to handle changes to their business model and they way they manage projects.
Often a project manager will feel that they have less flexibility as they manage their project due to the additional controls the PMO adds.