- Although a Project Management Office can bring substantial benefits to project-oriented businesses and organizations, setting up a PMO may bring disadvantages that come at a hefty cost (time, money, energy). It is key to ensure that the payback from your future PMO will justify the investment.
- In order for the PMO to deliver on its promises, the PMO’s mandate, scope of action, and governance should be carefully thought through. What more, it is essential to communicate and publicize the PMO’s impact and achievements throughout the organization in order to avoid the kind of misperceptions that may kill any PMO.
We often hear and read about the many advantages of having a PMO. These include:
- providing a standard framework and defining common
- repeatable processes for project work
- supporting project populations with guidance and leadership (possibly with a coaching and training effort)
- improving the allocation and overall management of financial and human resources
- ensuring that priority goes to the projects that best align with the organization’s strategic objectives
- and much more
However, a PMO is hardly a magic wand that’ll make all of your problems and pain points vanish instantly. In order to deliver the expected organizational benefits, your PMO must create and deliver tangible value for the organization. You also need to allow for the organizational costs associated with the creation, deployment, and maintenance of a structure specifically dedicated to the management of projects and portfolios.
Now, an overview of the caveats and pitfalls that project professionals should know when setting out to create a PMO.
A Few Caveats for Businesses Considering a PMO
For a majority of project-oriented organizations, creating a Project Management Office is undeniably a smart move. A proper PMO will bring a vision to their project and portfolio management, creating efficiencies at scale. However, implementing a new management structure like a PMO is an investment, which brings disadvantages. Hence the need to ensure the size of your organization and the scale of project activity justifies the effort.
Let’s start with the obvious: the financial costs of establishing and maintaining a PMO (in terms of payroll, tools, offices, and more). In particular, enterprises that fund their PMO by their projects (as opposed to by the organization itself) may find that the extra financial burden inflates the budget of smaller projects. As a result, this will substantially gnaw away at their ROI.
Additionally, building a PMO from scratch will require considerable time and energy from your project leadership and populations. Someone has to:
- conduct an audit of the established practices
- assess the organization’s requirements
- formalize a PMO mandate and roadmap
- hire the required resources
- shop the market to find the right PMO tool
Sound exhausting? Yep, creating a PMO is quite some work!
Further down the road, once your PMO is up and running, you may find that the extra layer of scrutiny and control creates a time overhead. This can put additional work on your project managers, who’ll typically have to create more reports.
Still, all things considered, most of the organizations that have a Project Management Office don’t regret setting it up and find it well worth it in the long run. So long as you properly defined and deployed the PMO.
There are countless examples of PMO failures and disadvantages. Whether it is because the organization put the PMO together hastily, without really thinking it through, or because the choices that were made when positioning it were not the right ones, or because a once well-suited PMO failed to adapt to market or organizational changes and eventually lost relevance.
There are also times where a Project Management Office was flawed by design. For instance, some PMOs fail to establish and enforce uniform processes. They actually make things more complicated for project teams instead of facilitating their work. Or the scope defined for the PMO might be too limited for it to address the operational, financial, and strategic goals of the organization. The governance might be too focused on operational project metrics to really serve the strategic directions of the business. Last but not least, the staff of the PMO might not be qualified enough (lacking hard skills and soft skills alike) to deliver on its mission.
Among the most common shortcomings, limitations, and weaknesses of ill-conceived Project Management Offices are a lack of clarity as to their roles and responsibilities. When establishing a new management structure, ambiguity and confusion are usually fatal. The purpose, reason for existence, mandate, and scope of the PMO — including how it relates to the various roles involved in project work and project management — should be clearly defined and widely communicated across the organization.
Another domain requiring great clarity and a communication effort is the action and impact of the PMO. Your PMO needs to demonstrate clearly how it “pays” for itself as well as which improvements it brings to project work and delivery, to user experience, and to the enterprise’s mission.
If your people can’t feel and see the benefits they get from your PMO, they are more likely to view it as a “Big Brother” created to monitor and track their every move, and/or as a rigid, administrative structure that destroys value by wasting everyone’s time.
It usually pays to write things in stone by formalizing the roadmap and objectives of your new Project Management Office and then document progress over time. Make sure the KPIs and metrics you choose to measure and report on that progress are compelling enough and that they will enable you to demonstrate short- to mid-term improvements.
Finally, disseminate these results across the enterprise in order to make them known to every stakeholder. This is of key importance: otherwise, your PMO may be at a disadvantage and suffer from an image of inefficiency — however relevant and impactful it actually is. Ultimately, those PMOs that don’t deliver visible value devolve into what Gartner describes as “zombie” PMOs – PMOs that “merely go through the motions, like the walking dead, performing compliance and clerical tasks, and making no effort to improve their contribution”. No one wants that. Hence, the importance of maximizing and publicizing the value of the PMO for the organization.
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