Getting Your Project Management Office Off the Ground

Today, organizations spend a large amount of their time delivering projects. While success rates have improved to approximately 34%, 15% of all projects still fail and 51% are somehow “challenged,” according to research from the Standish Group.

There are many reasons why projects fail—many of which can be attributed to a lack of visibility into long-term project needs. Without proper visibility, organizations are unable to see what is needed six months, three months, or even two months down the road, resulting in poorly constructed project plans that do not capture critical dependencies, including assigning project resources and key milestones.

While developing a software process improvement program can be costly, studies have shown that the resulting benefits of improved time-to-market, productivity and software quality far outweigh the initial investment costs. Establishing a PMO is the first step towards improving:

  • Project, program and portfolio management best practices;
  • Time-to-market acceleration; and
  • The quality of your initiatives in a cost-effective manner.

    Getting Your PMO Started

    The first step to establishing a PMO is to determine your organization’s needs. Start by examining the key processes in the areas of project, portfolio and program management as defined, for example, by the Project Management Institute’s (PMI’s) PPM/PMO framework.

    This framework has three levels (project, program and portfolio), each of which broken down into 12 process groups (e.g., project initiation, project planning, etc.). The process groups consist of 92 processes in total, and these processes relate to the management of nine knowledge areas (e.g., scope, cost, time and resources, etc.). Examples of PMI processes/components include a project charter, project plan, work breakdown schedules and cost estimate.

    You must also determine what type of management office best suits your needs—project, program or portfolio. In some cases, all three might be necessary but in order to help decide what is right for your organization, each is defined below.

    A project management office oversees a temporary effort with a definite starting and ending point. The project management office helps development teams finish projects on time and on budget through the use of established best practices, while ensuring the finished project or product meet stakeholder requirements.

    A portfolio management office oversees a collection of projects aligned to meet specific business objectives. For example, a retailer needs to reach out to five million new customers via the Internet. In this case, a portfolio could consist of e-commerce initiatives that support the common strategic initiatives related to establishing a Web presence. Key objectives of a portfolio management office include aligning portfolios of projects and services to business goals and managing risk exposure to the business.

    A program management office oversees a collection of projects or portfolios that, when managed together, often provide greater benefits than if they were managed separately (for example, a compliance initiative or cost reduction initiative). A program management office is typically tasked with providing an optimal mix of resources and achieving economies of scale.

    To determine what management office best suits your needs, analyze the importance to your organization of each PMI process. For example, if your immediate issue is to improve project success rates, then consider starting with a project management office. If your immediate issue is the need to understand where your dollars are being spent, consider starting with a portfolio management office.

    The results of your needs analysis will guide you in determining which of the three offices are most suitable for your organization. It is also important to note that while the project and program offices are typically established first, there is no real predefined order you need to follow.

  • For more on Project Management go to Project Manager