PMO Passion: Where does it come from?

Why is it that in a business conversation the simple term PMO conjures up such vast differences in thoughts, ideas, and convictions? There are those people that think of this three letter acronym more as a four letter word - and not a nice one at that. These folks often cite examples of organizational bureaucracy, inflexible methodologies that could choke a horse, and a focus on producing project documents rather than producing project results. And to no discredit of any of these people, they often have a very legitimate point of view and beef. And, then you have those people that are so passionate about "All Things PMO" that you sometimes wonder where all of that PMO passion comes from? Well, I am one of those people and let me tell you where my passion comes from..!.

Over twenty-five years ago, my immediate manager called me into his office and told me that he had an "opportunity" for me. I put opportunity in quotes because it was a well known fact amongst the non-managers in the office that whenever a manager said they had an opportunity for you, it was really a problem in disguise and the monkey had just been placed on your back. It took me years to appreciate that it is actually the other way around and that a "problem" is really an opportunity in waiting. But that is a story for another day.

So what was this problem? Well, to put things in context, the year was 1981 and the company was IBM and the problem was that the investment analysts were unhappy with IBM's business model. In particular, the so-called experts didn't like the fact that IBM's revenue, driven by the rental of mainframe computers, produced a contractually committed, multi-year, recurring revenue stream with nearly 80% of the next year's revenues and 60% of the year after that, and 40% of the year after that being known in advance. You see, back then you couldn't purchase or lease a 3033 mainframe, or a 3705 communications controller, or a 3350 direct access storage device (DASD), or a 3420 magnetic tape sub-system, or a 3270 cathode ray tube (CRT) monitor, etc. You could only rent them. And, for reasons still unknown to me today, the investment community back in the late 70's and early 80's felt that IBM should sell, not rent, its products and recognize a greater amount of initial, one-time revenue for such customer data processing needs [the terms information systems or information technology weren't yet in use]. The end result was that despite repeated, strong year after year financial performance, the investment analysts didn't rate IBM stock highly. Rather, it was positioned as a "Low Risk - Low Return" portfolio balancer. And, as virtually every IBMer participated in the IBM Employee Stock Program, this made us all mad. There's nothing like skin in the game to foster teamwork.

So what does all of this have to do with PMO Passion? Well, IBM announced to the world that it would begin selling, not renting, its data processing equipment. And as part of this new corporate strategy, IBM was committed to converting the huge rental revenue stream by getting customers to purchase their installed machines as well as purchasing new machines. No more rental, though it was still an option.

To make this new financial strategy a reality, quite a bit had to take place both internally and externally. There were requirements that had to be met from just about every aspect of the business; applications, financial planning, field training, information dissemination, reviews with the customer of financial options and alternatives, more field training and support, etc. And, all of this had to be driven down from corporate staff to division staff to district staff to the local sales and marketing branch office level where the rubber met the road and the work got done. Of the more than 250 sales and marketing branch offices that were all trying to accomplish the same thing, a few of these offices had branch managers that formed a project office to lead, manage, stay on top of and report back, the myriad of project efforts required to achieve success. And, big bonuses were on the table as was the risk of losing your branch office if you couldn't produce.

Thus, I was given the opportunity to be part of a newly formed PMO within a sales and marketing branch office that would only exist for one year and that had very specific objectives [how much by when] to achieve with minimal direction. So, to fast forward, after the year was over, we exceeded our objectives for which the PMO was established in the first place and to our surprise and delight we finished as the number two branch out of more than 250 branches in the division. But the real kicker was that the branches that established PMOs, about 25% of them did, far exceeded those that didn't and exceeded their targets by ten to fifteen percent. It didn't take a financial genius to realize that an improvement of a ten to fifteen percentage points on a branch office's hundred million dollar revenue plan adds up to some real money, real quick.

This was my first of many exposures to the business value of a PMO. Many years later, and after having been involved with PMOs of all shapes and sizes such as line of business, IT, software development, sales and marketing, global, and even virtual, my appreciation for PMOs and the business results that they can produce has only increased. The business value of the PMO - that's where my "PMO Passion" comes from.