Risks and Benefits of a Project Management Office

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 recent market study from ProjectManagement.com revealed that 43% percent of the participants operate at the low end (Level or 2) of maturity for project management leaving lots of room for the benefits of a project management office. 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.

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 of 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.

Benefit from best practices

Best practices and project management are managed and handled by the project management officer, offer training and support in the development and implementation of project management tools and techniques. PMOs for creating, managing, and sharing project documents, documentation, best practice, etc.

Companies are struggling to figure out how best to use Project Portfolio Management Tools (PPM) to increase their business value. A Program Management Office (PMO) can demystify the project management process and ensure a strategic and tactical approach that is holistic and derives the most significant benefit from each project. Here are five business benefits that PMOs can achieve if they effectively align PP and PM initiatives with corporate strategy.

Create 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 project management office (PMO) is quite a big task. This involves 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 involve a team of project management professionals from across the company as well as other parts of the business.

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.

Create 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. A 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.

Conduct 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.

So what are the 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 to 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.

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.

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