With increasing pressure on IT departments to execute projects successfully, companies are looking towards setting up Project Management Offices to help themselves tackle the challenge.
A Project Management Office is a group within an organization that provides guidance and advice on managing projects within the enterprise. It exists to devise and maintain project management standards and methodologies with an objective of making the organization more efficient in executing projects. It supports and improves the quality of the standard project life cycle in an enterprise and can help in maintaining a project portfolio.
Benefits:
While the obvious benefit of setting up a PMO is an increased control over costs, it adds tremendous value by aligning and streamlining the various project activities of the IT function.
Generally the PMO provides the following benefits:
Standardizing sound project management practices that make the organization more effective.
Instills best practices into project execution by guiding project teams and providing advice.
Creates opportunities for optimizing IT investments by way of portfolio management.
Ensures optimum resource utilization and allocation to projects.
Mentoring project management teams and providing consultative advice to employees in general.
Increases project success rates and business credibility in eyes of customers.
Increases employee morale as a consequence of improvement in success rates.
Setting up a PMO:
Before going ahead to see what activities constitute setting up of a PMO, it might be useful to understand the functions that a PMO executes:
A PMO:
Supports the entire project life cycle by guidance/ participation, and introduces best practices
Acting in both consulting as well as participating capacity the PMO supports the project teams in their project challenges.
Provides definition and structure to project elements
The PMO touches each and every aspect of project planning and execution and undertakes responsibility to provide a blue print for activities and processes in each of the stages.
Maintains project portfolio
Due to its higher hierarchical position in the organization vis-à-vis the project teams, the PMO is able to plan and maintain a project portfolio by prioritizing and selecting projects. This function has been known to save enormous efforts and costs for many an organization by way of reducing the number of projects executed to a critical few.
Creates and facilitates a knowledge management framework
The PMO liaisons with different stakeholders of IT in the organization and provides a framework for communicating information and activities between the IT function and other stakeholders in the organizations.
Devises project metrics to track success
The PMO's critical function is evaluating project success or failure and this it does by devising relevant project metrics to track performance of individual projects/ portfolio categories. It also provides a project dashboard to the management for tracking the health of different projects at a glance.
Identify "pilot project" candidate.
Define governance structure for project office
Formalize training on standards, processes, and tools
Review project office scope and effectiveness
Conduct "Project Assessment" on identified projects.
Organize and staff project office
Implement key practices such as risk and resource management
Review organizational readiness
Assess current project management practices in use within identified projects
Establish business benefits and measures
Establish links among processes, measures, knowledge management
Ensure methods for continuous improvement are established
Determine required processes and capabilities
Publish standards and processes to be used
Monitor implementations and apply changes as required
Transition project office to customer utilizing a phased approach
Confirm project office vision
Any exercise in organizational development seeks its justification in financial outcomes. A PMO is no exception. Success of the organizations' PMO can be directly seen in improved cost control and better utilization of IT budgets. Besides financial indicators, the number of successful (in-time and within-budget) projects, and customer satisfaction levels are the usual other metrics.
Setting up a PMO no doubt requires a sustained effort and is no quick fix solution. However given the increased dependence on IT applications and infrastructure in business today, a PMO created by due attention to factors above can help an organization be more efficient and profitable.
