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There has always been a tug of war between how much to invest in a PMO (better understood as Project or Program Management Office) and what is the ROI on that investment. The core of the problem does not lie in the PMO setup or the PMO operations; but the expectations of the stakeholders which do not shape up well during the execution phase as each one has a specific demand and expectation.

Let us first understand the role of PMO in a transformational project to ensure that PMOs get the deserved sponsorship from the C-suite and relevant stakeholders. A transformational project leads to a fundamental change in the operating model and key to delivering that change will need developing the strategy defining the future state (TO-BE), understanding the current state (AS-IS) and how the gap between the two can be bridged. Understanding the current state of your business will help you in identifying the vision for the future. A PMO plays a critical role in this journey where there is a compelling need to make changes to people (not dislocating them), process and technology to better align the organization with its business strategy and vision. The critical part of transformation roadmap is the outcome at each stage which will help in identifying the investment needed and measuring the value delivered.

PMO-driven organizations better deal with the uncertainties or the surges and with the pockets of the organizations working in opposite ways trying hard to reach a melting point. PMOs tend to improvise and prioritize the projects and programs which help in delivering the strategy and ensuring that a balanced portfolio exists leading to optimum utilization of resources. PMOs are better equipped with a data-driven approach provided they are making best use of tools and latest technologies which can help project a 360-degree view of the organization with a pathway to maturity.

An important challenge while setting up PMOs is the level at which they are placed. It is very important that PMOs must report directly to the decision-makers or C-suite responsible for ensuring that the transformation initiative is successful, and strategy is delivered as per the roadmap. PMOs are also supposed to support in the selection of making strategic choices such as mergers and acquisitions to increase organization’s market share and build competencies in niche areas.

PMOs must act as strategic partners not only during the strategy design; but in the execution phase as well to ensure that right standards, processes, and practices are institutionalized and applied by the project teams.  According to PMI's Pulse of the Profession™ report it is found that 65 % of projects at organizations with a PMO were successful compared to 56% at those without one. Yet there is a very shocking statistics from Association for Project Management which says that 50% of PMOs close within three years. The major reason for such failure is the widening gap between what the PMO is doing and what the business expects them to do.

It is very important to understand the following four aspects before you jump into the implementation of PMOs.

  1. Purpose-driven PMO - The key to any business entity, community, project or even a task is to understand the purpose for which it has been created or defined and so is the purpose of your PMO that you want to achieve or deliver in short-term or long-term. If PMOs are not clear on their purpose and it does not align with organizational purpose, there is every likelihood the PMOs will either become defunct or start losing their value over a period. A supportive or value driven PMO will have more engaged stakeholders and PMO team will have a strong business case for getting the required sponsorship and setting focus on key result areas. A collective alignment from your stakeholders keeps the purpose alive and helps in building collaborative relationships.

 

  1. Flexibility in methodology - It is very important to get a buy-in on the methodology to be adopted and make sure you involve all your key stakeholders rather than just communicating them. There is no one-size-fits-all approach, and it is important to have flexibility in the methodology and alternative options to the approach so that tailoring can be done as and when needed. It will ensure easy adoption of practices and help in continuously innovating best practices across the organization.

 

  1. Performance metrics according to stakeholders – Performance measurement plays a very critical part in building mature processes and identifying improvement areas. The metrics to be used to present your performance need to be aligned with your stakeholders and the data they are interested to look at which helps them in decision-making process and achieving their business goals. The project success rate is although a very important metric; but stakeholders might also be interested to measure the benefits delivered, or the customer satisfaction rate is of prime importance. A project may be successful on scope, cost and time yet the actual benefits delivered need to be measured in terms of savings on each transaction or manual effort reduced per transaction or even improved employee motivation.

 

  1. Organizational Learning and Capacity Management - Every project is meant to deliver a change and has a learning associated with it. The organization learns from their past projects delivered and builds capacity to meet the future needs. PMOs are the repository for such source of information at the enterprise level and they can help in establishing best practices and sharing the learnings from the retrospection lessons to the advantage of new projects and programs.   

  

PMOs get the right sponsorship when they build the right perception of value and provide the leadership with a both inside-out and an outside-in view of projects and programs. When PMOs help in driving sustainable competitive advantage they become the trusted advisors and key influencers to the decision-making and corporate strategy process.


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Gaurav Dhooper
Assistant Vice President, PMO

Strategic thinker, seasoned Project/Program management professional, Agile IT Delivery/ PMO Leader, author and a keynote speaker at various global platforms. Areas of interest include Digital Transformation & Strategy, establishing Strategic Partnerships and implementing Agile ways of working. An avid writer and has authored many articles on Digital Transformation, Agile Transformation, Agile Project Management, Scrum, Project Management Offices and Hybrid Project Management. Has been reviewer for PMI’s Standard for Earned Value Management, Standard for Program Management and a book on Agile Contracts. Holds the voluntary positions of President of PMO Global Alliance India Hub and Senior Official of IAPM for Noida. An active volunteer and member of PMI. Works with Genpact as Assistant Vice President, Business Risk Management PMO (Program Management Office).

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