Managing projects in an organization is a way of doing business, And usually someone leads the ‘project’ and is responsible for its overall success or failure. The failure is not only failure but also loosing time and Money and even labor. There are many reason why projects fail, often due to lack of visibility into long term project needs. Without respectable visibility, organizations are unable to see what is needed in the several steps of the project that result in weakly developed project plans. Those ‘weakly’ plans do not capature critical dependencies, including assinging projects resources and key milestones. According to the result of Standish International Group of Survey (Participants are 2500 Project Managers) , the project success rates without PMO is that %53 of projects are under perform, %31 of projecs are cancelled. The main reason is poor organization and project management practice. To prevent failure , the projects or programs need to be supported, controllled and monitored by an organization.
PPM and PMO are the organizations that monitors and controls the projects and programs using end-to-end process. Project Portfolio Management (PPM) and Project Management Office (PMO) have the disciplines of strategic alignment, prioritization and governance of projects and programs. PPM and PMO governances establish the structure, accountabilities, polices, standards, processes and control mechanisms that are the basis for decision-making.
PMO services start from focusing on suppliying tools for projects and maintaining processes and methods, to more focusing on portfolio management and compedance development within the organization. With PPM, the organization is able to manage their human capital, prioritize their project portfolio, and build partnership with the business. This functionalities provide to the organization accountability, visibility, and credibility. And the business partners within the organization are fully engaged in prioritizing.
Most of time PMO establishes to set up project management procedures and processes, then the organization’s needs about project management increases in a short time and the controlling processes and tools are added into PMO processes. ‘Managers and/or Directors’ may need to know what projects are running currently and why. Especially there is a large scale project or program running currently, the investment should be controlled somehow. There are two options, PMO experts and/or PM will deeply work on project performance using excel or the organization will fund for PPM tool. The decision depends on the top management’s degree of concern and the data to be worked on project performance and PMO maturity level. When the PMO maturity level increases, the top management’s degree of concern will be increased as well. With or w/o PMO and w/o PPM tool, the project performance reports need data from different tools for resource management and project planning and budget. The result of consolidation of data may not be sufficient and secure due to the manuel processing.
The PMO is the facilitator or the driver of all the processes that accumulate the data needed to make the decision. Examining with PMO and w/o PPM tool case, PMO representatives are definitely on the steering committee but they are not able to speak how to priorization of the projects due to lack of information. This is the key point for business executives to make decision on what is going to be executed. Executives need to understand how projects get approved and funded, as well as how they turn out. Portfolios within the business units need to roll up to the enterprise level. If PMO exists to drive the business unit portfolio, the PMO experts and upper management should work on project priorization. If PPM tool exist, the primary function of PPM is to prioritize the projects portfolio. PPM is focused on making project decisions intended to achieve the fundamental and strategic objectives of the organization. If PMO exists but not centralized it makes it extremely difficult to do prioritization, selection and portfolio optimization because the basic equation is that the organization has x amount of resources and y amount of work they want to do. Its just a fact that y is always greater than x. Organizations need to see everything in the aggregate and corralete each other to get easly report.
According to PMsolution Research, PMOs with primary responsibility for PPM has grown dramatically, from 18% in 2003 to 30% today. The PMOs are moving from temporary project level to a continuous support entity for portfolios of projects, on a higher level in the organization. PMOs, continue to drive further professionalization of the PPM organization, which includes the quest for more reliable and timely project information quality. Enhancing quality on project information, enables more dynamic project Portfolio managemet. PPM and PMOs are necessary investment which is returning qualitative and quantitative benefits. These investment in improvement, while reducing overall cost, will even increase the benefits, as the capability increases to actually manage project portfolios, and just look at project portfolios.
When PMO comes certain maturity level at least Intermadiate PMO, the following benefits will be expected:
Benefit #1: the PMO drives business decision
To make good decisions, good data is necessary and that’s why visibility is so crucial, both from a strategic, top-down perspective and from a tactical bottoms-up perspective. Using past project metrics, it makes it much easier to predict future factors like resource utilization or analyzing the current project portfolio, you can find out which projects are not contributing to corporate objectives.
Benefit #2: the PMO avoids or reduces exposure to risks
There are several categories of risks, including financial, governance, resource utilization, and misdirected efforts. Financial risk can be calculated the benefits vs. cost of cancelling a poor performing project, as well as identify projects that are not contributing to corporate objectives, Governance risk can be reduced to build an accountability framework that ensures that the right level of compliance is followed through every project lifecycle.
Benefit #3: the PMO has the ability to maximize your resources
Resources may be maximized when the PMO provides global view of project management in an organization.
Benefit #4: the PMOs is transparent to the stakeholders
PMOs reports to top management. Either top management or the other stake holders want to Access the project status and the results data they needed.
Benefit #5: the PMO creates an environment that leads to repeatable and predictable project success
To achive high performance Project Portfolio Management, those five major types of benefits can be gained by adopting an effective Project Portfolio Management/PMO strategy.