Do PMOs really add value? CEOs are not convinced

Do we really need Project Management Offices(PMOs)?

The value from PMOs is questioned by the very CEOs who requested them in the first place. Why is that? Executives are looking at their investment of money, time, resources, and effort into PMOs and are scratching their heads: “Is this really what I subscribed for?” They are not seeing the value. At least not as fast as they thought they would and not at the level that warrants the investment they put.
Here is why:

1. Most PMOs are implemented without a vision, architecture, governance, or plan.

In other words, the whole big picture is not there. It might be written somewhere in a document, but you cannot trace it into the very design, development, and operation of the PMO. For example: a PMO at a large semi-governmental organization is sitting reactively trying to stay up to date reporting on status of projects and getting it wrong half of the time. This is to the frustration of management who are: a) not happy with the inaccuracy of the PMO reports. and b) do not see the PMO playing an active role in ensuring project success. If you look back at the original charter based on which the PMO was built, sure enough you will find a high-level vision defined. But it is lost in the daily work of trying to collect progress information on projects. So, what is the solution? Operate the PMO and validate that it is delivering on the big picture. If it does not, reevaluate the activities that the PMO is doing, and reprioritize, so that the value sought is delivered. Deliver less things that are more value, rather than more things that are less value. Set expectations in the organization accordingly, so everyone knows what the PMO is trying to do and understands why.

2. No clear plan to build the capacity of the PMO

starting with quick wins that show value at the executive level, before trying to get into the detail daily progress and data collection. The solution: similar to number one: focus on the big picture value rather than tactical detail work. Remember the more into detail you get in the managing of the project, the further you will be from the big picture and the harder it will be for the PMO to stay focused.

3. The relationship between the PMO and management is not defined well.

Especially Middle and Upper Management. You will find the PMO working at the functional management level, and with the Project Management staff, but rarely do they interface with middle or upper management. This is a problem because upper management needs to see value to continue supporting the PMO, and Middle Management is the layer that will resist the changes the PMO brings, or most other types of changes in the organization for that matter. The solution is two parts. First: Clearly define and communicate governance. Then: form steering committees to support the PMO at Middle and Upper Management levels.
There is a lot more that can be done to ensure your PMO adds immense value to the organization but the above are good starting points. What value do you wish PMOs would provide for their organizations?

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