As numerous studies have proven for years, companies with a Project Management Office have more success in the project business! I can only confirm this argumentative essay to successfully start and lead PMOs from practice.
Is the introduction of a PMO really worthwhile?
The introduction of a Project Management Office is inevitably associated with difficulties. That’s why we’ve compiled the common problems of Introducing a PMO that need to be considered and avoided.
Due to the effort required, many companies are uncertain in agile times whether the introduction of a PMO really pays off. However, when looking at figures, data and facts, the answer is usually positive. In the following article you will learn why.
Professionalization of the project business
Due to a lack of sufficient capacities or insufficiently qualified project managers, projects in many companies are carried out without professional project management.
In many organically grown companies, the first projects are not very complex anyway and remain manageable. Pragmatic and situational action usually leads to the desired success. One must never forget that during this time there is also an intensive support of the management. This is also where the focus is on project content. The overview of deadlines, costs, resources and customer satisfaction is already lost here.
However, with the steady growth of the company, the complexity also increases, the internal division of labour begins and the areas of responsibility are rearranged while at the same time the differentiation of projects increases. The search for suitable methods and tools for project management begins. If not already here purposefully steered, then many different methods and aids are introduced, which are given up later justified way only with resistance. One has become too fond of one’s own tools or has invested too much in adapting them to one’s own needs.
Already with these simple examples it becomes clear, how a Project Management Office can support the establishment of a systematic project, program and portfolio management and must support out of economic considerations.
Standardization of project methods
The more a company’s focus on project business increases, the greater the need for standardization of project management methods and tools for reasons of efficiency and thus profitability.
In practice, the project methods used are often based on the experience and ideas of the project managers. Everyone works as a more or less successful artist in his or her profession. A uniform project methodology cannot be established in this way.
In such cases, project managers and project staff only learn from their own mistakes and not from those of others. This means that new projects often have to struggle with the same mistakes and problems. And that makes inefficiency inevitable.
A Project Management Office must counteract this by developing a uniform approach for all projects of a company together with the active project managers and project teams. The already existing know-how is too valuable to be ignored. This initially increases the effort, but in subsequent practice reduces the costs for project management and at the same time makes it possible to compare projects. At the same time, the integration of the existing project team also ensures acceptance for the application of the new methods.
A PMO is not necessarily required for uniform project management methods. However, having a corporate unit that also trains these new methods and monitors compliance with the guidelines benefits every project.
Support of the project management
Instead of planning costs and making important decisions, they often sit in front of a mountain of administrative tasks or are busy with controlling.
Here, a PMO must provide valuable support, relieve the project management and speed up the decision-making process. At the same time, this is also a preventive measure to prevent the frequently occurring burnout in project management.
Unburden of the project team
But also for all project members there are numerous administrative tasks in the project. Results must be documented, reports created and project tasks planned. If the PMO succeeds in creating a uniform system, establishing standards and removing such tasks from the operational project routine, the project management and the project team can devote themselves to their core tasks. The effectiveness of the project team thus demonstrably increases.
Improvement of internal project communication
One of the most important success factors for effective project work in today’s information overload is optimized communication. Only with a successful internal project communication can the exchange, coordination, motivation and commitment of the project staff be permanently guaranteed. Well-considered and orderly project communication with the customer and the contractual partners involved in the project ensures that everyone is involved in accordance with their obligation to cooperate, that they are informed about decision-making processes at an early stage and that they can also support the decisions.
Missing or bad communication causes misunderstandings, resistance and conflicts and acts as a creeping trigger for many a project crisis. In short: “This endangers the cooperation in the team, with the customer and contract partners and questions the success of the project”.
Of course, the success of a project does not only improve through a lively exchange of project members. The necessary framework conditions are already required to promote communication in the projects in an orderly and goal-oriented manner. The Project Management Office can serve as an interaction and communication platform that simplifies networking. It also facilitates the exchange of experience between project managers.
Alignment of all projects with the corporate strategy
When every project, every project manager in the company implements the corporate strategy according to individual ideas, we hardly take a holistic approach to the corporate strategy. Corporate and business strategies are implemented through projects and therefore not all projects of a company contribute directly to the corporate strategy.
If project management is understood not only as a problem-solving methodology, but also as a means of implementing strategies, it becomes clear why the alignment of all projects with the corporate strategy is of essential importance.
The Project Management Office ensures that all implemented projects are aligned with the corporate strategy. This includes deciding which tenders/projects to apply for in the market and how to align oneself with regard to cost and resource analysis and the prioritisation of projects based on this, among other things.
Establishment and promotion of a project management culture
Knowledge, experience and tradition of project work often differ from the classical corporate culture. The hierarchies in the project are significantly flatter, the willingness to cooperate higher and the ability to deal with conflicts more pronounced.
But organisational aspects such as personnel development, training, PM assessments, willingness to take risks, change management and a “learning” organisation are also factors that distinguish project management from classical corporate culture. The potential for conflict in particular also offers a huge opportunity, provided that this potential is moderated neutrally by a PMO and recognised as potential for improvement and integrated into existing processes.
A PMO offers an ideal opportunity to introduce and promote such a project management culture throughout the company. Yes, because of its flat structure, it can also provide a stimulus to rethink an overflowing corporate hierarchy.
Best practices and knowledge transfer
One of the most basic tasks of PMO is the collection, structuring, analysis and dissemination of knowledge. The Project Management Office is the guardian of a company’s project knowledge.
This knowledge is created primarily through the evaluation and interpretation of “lessons learned”. But also, and this is almost more important today, in the collection of data and facts. In an increasingly agile world, it is no longer a matter of retrospective observation but, above all, of anticipating the development of a project, of being able to foresee projects. This future task can only be accomplished by a PMO at all.
By passing on best practices, this knowledge is made available to all employees so that learning processes can be accelerated and a train-the-trainer concept or even a coaching structure can be introduced in large companies.
The PMO is also responsible for maintaining an overview of resources and capacities and passing this on to the business managers. In the classical sense, the PMO is to provide the figures, data and facts to support the management process. This is the only way to create a requirement matrix for a well thought-out project portfolio based on the available resources.
Project management tools and infrastructure
Today, suitable and uniform (software) tools are essential for professional project management. The Project Management Office must make a selection of suitable tools in order to offer optimal support, as well as to keep the costs for acquisition, service and training within limits. This simplifies the work of the project managers enormously and is the prerequisite for comparing projects and exploiting further improvement potentials.
In addition to the selection of software tools, it is the task of a PMO to train and educate project staff (worldwide). Thus, the project employees are first trained by the PMO and later individually coached in the sense of a train the trainer principle. This prevents comprehension problems and enables internal project cooperation at a high level.
Prevent failure – increase effectiveness
At a time when companies need constant agility, projects are becoming increasingly important. The increasing relevance of projects also increases their contribution to the company’s goals, which is associated with increasing responsibility.
Companies cannot afford to let projects fail or run aground, because not only the material damage but also the immaterial damage has an impact. Project Management Offices offer various possibilities to prevent the failure of projects or to cushion the consequences considerably.
According to studies, a well-managed PMO can almost double the effectiveness of project teams (cf. Litke 2007. Project Management. Methods, techniques, behaviors. Evolutionary project management. S. 243).
PMO ensures faster implementation, lower costs and higher project quality.
A Project Management Office thus offers many structural, administrative and operational advantages for professional project management. It ensures the standardization of project methods and relieves project management and the project team.
Internal processes are improved by more efficient communication and all projects are adapted to the corporate strategy by the PMO. Within the company, the PMO establishes a project culture and improves knowledge transfer between the projects of a company.
All this leads to project work becoming more professional and fewer projects fail. Especially in times when agility forces economic action, these are powerful arguments for a PMO.