Are you in the process of setting up a new Project Management Office (PMOs)? When your business grows to the point that a PMO implementation is on your To Do list, you’ll want to make the biggest impact as quickly as possible.
We regularly support organizations in their efforts to set up new PMOs. We see similar challenges in many cases, regardless of the industry or experience of the leadership team.
Here are 5 things to look out for as you start the process to build a PMO capability in your business.
1. Silos and stovepipes
A stovepipe goes straight up to the ceiling and lets out the smoke. It’s also a business jargon term that means the organizational structure is hierarchical, with restrictions on how information flows outside of the immediate chain of command.
You’ll also hear this described as an information silo. Information isn’t shared across the organization, which makes it difficult to engage colleagues in other teams or even to know if you are doing the right thing. When the organization is set up in stovepipes, you can’t immediately tell what the impact will be on another division, because you have no idea what they do or how they will be affected – and no easy way to find out.
Stovepipes in an organization prevent PMOs from accessing the information they need to make decisions about projects. For example, portfolio prioritization should be done with a view across the whole business, so projects can be appropriately resourced in a way that gives priority to the right projects. Inability to access information can inhibit effective portfolio management.
Fix by: This challenge requires a long-term cultural fix, resulting in breaking down silos in the organization. You’ll need buy in from senior management. Over time, you’ll want to foster a culture of information sharing. You can create a project sub-culture by reaching out to the right people and managing across the silos, but it’s far easier if the organization itself becomes open to information exchange.
2. Lack of alignment to the strategic planning process
If you are setting up a PMO for the first time, one of the first jobs is to find out what projects are happening in the organization. Prepare to be amazed! When you’ve got the list, you might find something on there that you would personally never have approved if it was up to you, because it doesn’t support the strategic vision for the organization.
That’s no one’s fault. Before a project portfolio structure is set up, managers in the business wouldn’t have had a framework to align to. They might not be aware of the strategic planning process, and may never have had the opportunity to influence it.
Now you are taking the first steps towards building a PMO capability, you’ll want to spend time identifying where projects align to the strategic plan. Those projects that don’t need further review.
Fix by: Introducing project approval and prioritization processes that ensure each new initiative is adequately reviewed before it is approved to begin. That way you can make sure there is strategic alignment for future projects.
3. Lack of benefits realization
Are the benefits from projects really being realized? Your company is investing in the work to deliver these projects, but are you getting the returns you expected?
A common challenge for people setting up a PMO function is that there is very little already happening in the organization with regard to benefits management. Business cases might be produced, but no one is held accountable at the end for delivering the benefits.
Fix by: If benefits management is important to you, get it on the radar and create processes to monitor and track benefit realization. You’ll need to decide on the priority for your PMO: many PMOs start by getting basic project selection, governance, risk and execution frameworks set up first. Benefits are not a ‘nice to have’ but you can’t work on everything from day 1! PMO implementation planning will help you scope out when you can tackle this challenge.
4. Untrustworthy metrics
Often new PMOs struggle to get realistic, believable metrics because of the lack of systems, or disparate systems across the organization. Ideally, you want measures that show how well projects are supporting the business. But if the underlying data isn’t there (or isn’t reliable) then you are basically starting from scratch.
Work out what metrics you really want to track. Get management buy in for the approach you are going to take, and consult the project delivery teams to gain their support before making changes.
Fix by: Rolling out enterprise-wide project management tools or standard ways of reporting, to ensure projects can be fairly compared and analyzed.
5. Useless project information
Alongside performance metrics goes all the other types of project information, much of which is meaningless, as new PMOs soon find out! You might ask colleagues from across the teams to share what reporting they are doing on their projects, with a view to creating an enterprise standard… and you might be shocked at what you get back!
We’ve seen project reports that don’t share enough information to help leaders make investment decisions or the decision to stop a project. We’ve seen project directors given information that is out of date, or not detailed enough – or too detailed!
Project information provided by the PMO needs to be at the right level to help executives make decisions and understand what is happening in the organization.
Fix by: Creating enterprise guidelines for project reporting. Implement systems for everyone to use that consolidate data to create a single version of the truth.