The perils of PMO proliferation

 

Some organizations struggle to improve their PM or project portfolio management capabilities without having a PMO.  However, I’ve also encountered organizations that have established PMOs in multiple functional areas and at differing levels of authority – this situation is equally challenging.

Some of the risks of PMO proliferation are:

– Significant “hard” costs with limited perceived tangible benefits.

– A lack of process or tool consistency across PMOs results confuses PMs, resource managers, team members and other stakeholders and this in turn reduces the “bang for the buck” achieved from the overall organization project portfolio.

– Jurisdictional disputes between PMOs can impact credibility, cause communication issues and also reduce overall value received from a portfolio approach.

Large organizations may not be able to get away from having multiple PMOs, but a few ground rules can ensure that these risks are mitigated.

1. Ensure clear authority & mandate boundaries between the PMOs.  For example, if there is an enterprise PMO and a departmental PMO, project portfolio management processes at the enterprise level should be controlled by the enterprise PMO where as project management practices within a department can be controlled by the departmental PMO.

2. Ensure consistent project metrics across all PMOs.  The degree of discipline within each PMO’s methodology can vary, but the metrics that are reported for project status across different PMOs need to be consistent otherwise it is impossible to get an accurate understanding of overall portfolio health.  Beyond the nature of the metrics, the frequency of gathering or calculating of the metrics also needs to be aligned so that executives know that project data is up-to-date across the board.

3. Ensure resource management data and practices are standardized across all PMOs.  A critical foundation to project portfolio management is that organizations have to have a consistent, accurate, near real-time understanding of resource capacity and allocation.  If one PMO is tracking resource data at the individual resource level while another does it at the skill level, it becomes very difficult to look at supply vs. demand at the organization level.  Similar to the previous item, I recommend standardizing on a handful of resource metrics that are tracked in a consistent fashion across all PMOs.  However, as resources can work on projects that span the oversight of multiple PMOs, it is important that resource request, allocation, evaluation and release practices are also standardized across these PMOs to avoid confusion and improve integration.

4. Use common tools across all PMOs.  While the degree of project management discipline might change on a PMO-to-PMO basis, and some of the services provided by the PMO might vary (e.g. one PMO staffs the PMs for its projects while another only provides project oversight) the tools that are used to automate the PM processes should be the same.  If not, significant cost and resource effort will be required for integration, establishing an organization-wide resource pool becomes very difficult, and it is much harder to negotiate for enterprise license or subscription agreements with tool vendors.

Your organization may be experiencing the phenomenon of PMOs spawning like Mogwai dropped into a swimming pool, but this should not imply that the efforts of these disparate PMOs cannot be aligned towards (what should be) a common goal – facilitating the creation of business value.

(Note: this article was originally written and published by me in December 2009 on my personal blog, kbondale.wordpress.com)