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March 8, 2023

9 minutes read

Risks and Benefits of a Project Management Office

By

Andrew Graf

Benefits of a Project Management Office

Enterprise project management can be a risky business, but also a very rewarding one when everything works as expected. Unfortunately, managing projects of this size can be fraught with pitfalls and the cost of failure is often too high for an organization to absorb, let alone tolerate. But what can organizations do to mitigate these risks as much as possible, while still delivering projects as promised?

A market study from ProjectManagement.com revealed that 43% percent of the participants operate at the low end (Level or 2) of maturity for projects. Operating at these levels for enterprise-scale projects leads to increased risk, delivery issues, and cost overruns. Conversely, organizations operating at the high end of the scale (Level 5) are consistently able to deliver projects on schedule, on budget, and that meet business needs.

Can these organizations with low project management maturity take a page out of the playbooks of Level 5 organizations to avoid some of the risks that have been plaguing them? Absolutely. And with the right strategy and a reasonable amount of effort, Level 1 and 2 organizations can begin to shift the momentum in the right direction – starting with the creation of a Project Management Office.

A Project Management Office (PMO) is a group (internal or external within the company) that ensures the standards for project management within the organization. What exactly is the role of a PMO, and what is its purpose in project management? The tasks of the PMO include project planning, project planning and management, budgeting, project implementation, and project implementation.

The scope of the benefits is directly related to the location of the project office within the organization. If the PMO performs poorly, it can set the company back and create a negative feeling about project management, making it difficult for stakeholders to invest time and money to reintroduce the PMO at a later date. For this reason, organizations should establish a Project Management Office by pre-assessing risks and benefits.

When you have a centralized department within an organization that sets, maintains and enforces project management standards across the organization, there are many benefits including:

  1. Consistent Standards

A PMO ensures that consistent project management processes, procedures and methodologies are applied across all projects in an organization. This leads to better coordination between teams, improved communication and collaboration, reduced duplication of effort and enhanced efficiency.

  1. Improved Resource Utilization

By providing visibility into resource allocation across projects, a PMO can help organizations optimize resource utilization, identify areas where additional resources are required and avoid over-committing resources to multiple projects.

  1. Enhanced Risk Management

A PMO provides a framework for risk identification, assessment and mitigation across all projects in an organization. This helps reduce the likelihood of project failures, enhances decision-making capabilities by providing relevant data points for informed decisions and enables effective risk response planning.

  1. Better Reporting

PMOs provide regular status updates on project progress to stakeholders at all levels of the organization. This improves transparency and accountability while ensuring that key decision-makers have access to accurate information about project timelines, budgets, risks and issues.

  1. Continuous Improvement

PMOs regularly review project management processes to identify areas for improvement and implement changes accordingly. This facilitates continuous improvement in project delivery capabilities while ensuring that lessons learned from previous projects are incorporated into future initiatives.

The Benefit of PMO Best Practices

Best practices and project management are usually managed and handled by the project management officer. The PMO can offer training and support in the development and implementation of project management tools and techniques and can put best practices in place around creating, managing, and sharing project documents, documentation and more.

If your company is struggling to figure out how best to use Project Portfolio Management tools (PPM) to increase its business value, a PMO can help to demystify the project management process and ensure a strategic and tactical approach that is holistic and derives the most significant benefit from each project.

The Benefit of PMO Best Practices

Best practices and project management are usually managed and handled by the project management officer. The PMO can offer training and support in the development and implementation of project management tools and techniques and can put best practices in place around creating, managing, and sharing project documents, documentation and more.

If your company is struggling to figure out how best to use Project Portfolio Management tools (PPM) to increase its business value, a PMO can help to demystify the project management process and ensure a strategic and tactical approach that is holistic and derives the most significant benefit from each project.

Creating a Formal Project Management Office (PMO)

Creating a formal Project Management Office (PMO) might sound daunting, but PMOs can come in all shapes and sizes. Whether it’s one person or a team of dozens, the focus of the PMO is to help stakeholders and resources navigate the waters—determining which projects to take on, what enterprise project methodology is the best fit, managing resources effectively, and keeping teams in the loop on the health of a project.

Establishing a PMO might involve restructuring your company, or at least part of it, to take advantage of bringing together project management professionals from across the company. So, you have to go in with your eyes open and make sure to involve a team of project management professionals from across all part of the business to ensure success.

Creating an Effective Intake and Governance Process

When project requests are coming in from all directions, but there’s no objective way to evaluate them, many organizations will just take them all on without really knowing if there’s a realistic chance of success.

project intake process helps you evaluate requests against established criteria to help you sort out which projects should get the green light now, which should wait for a better time, and which won’t deliver enough ROI to the business to even start. And for projects that are underway, a governance process enables you to see if a project should continue or if it should be paused or canceled due to factors that may arise midstream.

Conducting Resource Capacity on an Ongoing Basis

Project resources are often working across multiple projects concurrently and/or need to split their time between project work and tickets. For a project manager, ensuring their project resources are allocated properly for adequate coverage of all needs can be a delicate balancing act, but it’s essential to the success of projects and day-to-day operations.

For PMOs to be accepted by all parts of the organization a commitment from senior management is required. PMOs in an organization tend to be departments or groups of people that manage the standards of projects that are achieved. The PMO focuses on the introduction of processes to ensure that a standard approach is adopted for each project.

When you take a project portfolio approach to project management, you can better engage in resource capacity planning. This is a big benefit for organizations using TeamDynamix PPM.

At Boston College Denis Walsh, Director of Project Planning and Portfolio Governance, is very fond of the resource management functionality of TeamDynamix, which supports the analysis of the proposed work.

“The ability to have a complete picture of what our resources are scheduled to and plan that out six, eight, nine months or more into the future is one of the key areas the tool has made a difference,” says Walsh. “It has helped us with resource capacity planning. We use the capacity planner to look at what’s being introduced or being requested, and to make sure that we see and identify any resource constraints or bottlenecks before they actually happen.”

The PPM tool has also been very helpful in automating the ITS team’s project request and approval workflow.

Walsh calls the PPM tool a huge time-saver from a productivity standpoint. “Project requests go through different processes depending on the type of request,” he says. “These are now automated with approval steps for each, including architectural review, financial review, resource management, and resource allocation.

PMO Risks

If you don’t intend to bring together your service management and project management on a unified platform you run the risk of poor transparency and communication – creating silos that can stunt growth and success.

When organizations manage tickets, change management and projects separately, the issues are far-reaching. Resource optimization is just one goal of the PMO – the other areas of focus include communication, tracking and information transfer.

Using a single platform can help with this.

When everything is in one place, CIOs can get better visibility of the entire operation — imagine one dashboard – tickets in violation of an SLA are in one box, projects at risk in another, projects with due dates in the next X days or months in another — everything is organized, and everything is at your fingertips. The PMO can also gain visibility to the broader operation, facilitating a more cohesive team approach.

Kern Health Systems Levels Up Project Portfolio Management with TeamDynamix

Kern Family Health Care, a Medi-Cal managed care health plan serving residents of Kern County, California, uses TeamDynamix to administer the more than 30-plus active projects going at any given time.

Before TeamDynamix, Kern Health Systems was using another project management tool, but it wasn’t meeting the organization’s needs. LaVonne Banks, director of Kern Health Systems’ enterprise project management office (EPMO), wanted a flexible yet affordable project portfolio management (PPM) platform that could do both, without requiring separate software systems.

Banks oversees a team of 10 project managers who ensure the organization’s many projects are completed successfully.

About 90 percent of the organization’s projects have a technical component, such as integrating new state or federal rules and regulations into the software systems that Kern Health Systems uses to authorize procedures and process claims. These projects can range from just a few weeks to more than a year in duration, Banks says.

Previously, department heads would describe their project requests using a Word document and would submit this form to Banks’ office by email. EPMO staff would maintain a shared spreadsheet with information about projects that were proposed, approved, and underway.

However, this process was inefficient, and project managers did not have easy visibility into the status of projects. Looking to improve its project management process, Kern Health Systems implemented TeamDynamix in the summer of 2021.

Now, EPMO staff leverage TeamDynamix to manage the project requests and intake process.

With a simple and intuitive user interface, TeamDynamix makes it easy for project managers to evaluate project requests, approve and prioritize initiatives, assign resources and track and report on progress. TeamDynamix helps EPMO staff keep projects on course, establish clear expectations, and allocate resources more effectively.

“With TeamDynamix, I always have a source of truth on project data,” Banks observes.

Using TeamDynamix brings greater transparency to the project management process. It also saves Banks and her staff a great deal of time when they want to understand the status of projects and report this to organizational leaders.

“I love the platform’s reporting features,” she says. “They’re super easy to use. Being able to pull reports and quickly see real-time data is wonderful.”

Another key benefit of TeamDynamix is that it helps EPMO staff get out ahead of potential issues before they become full-blown problems. While some challenges are beyond the control of project managers, having greater insight makes it more likely that projects will be completed on time and under budget.

“We can quickly identify resource constraints and make adjustments when unexpected circumstances arise,” Banks says. “Because we can identify these issues earlier, we have a better chance of staying on top of resource management.”

Better transparency leads to more accountability and, ultimately, a higher success rate on projects.

When you consider that project portfolio management tools can cost several times as much for similar features and functionality, “the value of TeamDynamix is incomparable,” Banks concludes.

Want to dive deeper into the risks and benefits of project management office and enterprise project management? Learn More

This article was originally published in March 2020 and has been updated with new information.

Andrew Graf

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