5 Reasons PMOs Fail and How to Avoid Them
According to recent research and studies, the failure rate of Project Management Offices (PMOs) is significantly high. With up to 70% of PMOs failing, to some degree, within their first three years. This is often due to several factors, such as but not limited to, lack of clear objectives, inadequate focus on value delivery, insufficient executive support, failure to align with business strategy, and poor communication or stakeholder engagement.
PMOs are often set up with well-intentioned but ill-defined goals, including a vague expectation of increased coordination, improved information availability, better resource utilization, greater operational efficiency, increased quality/control and reduced failure rate of projects.
However, PMOs often fail to deliver on these promises due to inadequate planning and execution. It is only by understanding the common causes behind the high level of PMO failure that PMO managers, executive sponsors, senior management, project managers, etc. can work to fight any and all challenges that might hinder a successful PMO.
By properly defining the problems that face PMOs, businesses can then work towards solving them and addressing their root causes with a much greater level of success. It is vital that these challenges are tackled as early as possible, ideally prior to establishing a PMO and with strong executive sponsor backing.
5 Best Reasons why PMOs fail
1. Inexperienced or “accidental” PMOs
The ever-increasing demand for organizations to have their own Project Management Office, has inevitably resulted in a high number of inexperienced or “accidental” PMOs being established over the past five to ten years.
It is common to see project managers grouped together into a PMO, not because they have the training, accreditation or experience to operate as a PMO but rather because they are currently available. This often also extends to the management of the “accidental” PMO too.
The best way to avoid such an occurrence, as with most things, is prior preparation. An organization must provide the relevant access to training for those that work in the world of PMOs, as well as access to a dedicated body of knowledge, on both the setting up and operation of a successful PMO, such as the PMO Guidebook published by PMOGI.
Like constructing a house, it is easier to set strong foundations to then build upon, than to change them once the house is already built. Likewise, the early stages of setting up a PMO are incredibly important to its overall success and should be treated as such.
Ensuring that a PMO is staffed and led by trained professionals that have a strong understanding of, not just project management but also setting up and operating a Project Management Office will go a long way in combating the high failure rate of PMOs.
2. Perceived lack of value or Return on Investment
A PMO is the guardian of an organization’s project management documents, framework, governance, policies, and methodologies. Through this discipline, PMOs ensure a return on investment and increase the chances of successful project outcomes.
However, this is not always recognized by all stakeholders and can lead to misunderstandings over the value of a PMO. The key to avoiding this perception for PMOs is closely linked with the next point, Stakeholder Engagement.
A PMO must at all times accurately and appropriately engage with and communicate its value/purpose to stakeholders of all levels within an organization, not just the senior management to which they directly report, but also Project Managers who may wrongly see the PMO as overly bureaucratic “project police”.
3. Poor stakeholder engagement/management
As referenced in the preceding point, ensuring that the needs of the stakeholders are addressed by proper stakeholder management and engagement is of the utmost importance when setting up or leading a successful PMO.
It is vital that a PMO regularly, accurately and effectively communicates with all stakeholders to increase collaboration and ensure that it is clear where the ownership of management and control functions reside.
First and foremost, stakeholders must be identified. This includes the business units and the specific senior managers that will be involved in building, running and monitoring the PMO.
Also, the direct customers that will benefit from the PMO services such as the Project Managers and their teams. As early as possible, identify the stakeholders and complete a detailed stakeholder analysis, considering the following criteria:
● Define the level of interest, power, and influences.
● What role they might play in the PMO.
● Their supportive nature.
● Their need for communication and level of resistance to change.
Stakeholder satisfaction should also be monitored and tracked throughout the completion of projects. Through regular, and bespoke updates stakeholders of all levels can be kept engaged and supportive (or at least understanding) of a PMOs purpose.
4. Poor or lacking Policies, Procedures and Governance
Project Management Offices define, maintain and ensure the standard of project management within an organization. In order to run successful initiatives by establishing a PMO, the governance, policies and procedures, through which it operates, must be aligned with each other.
However, it is often the case that a PMO either lacks or is following poor policies, procedures and governance. PMOGI recommends working down from governance, to policies, to procedures.
Firstly, good PMO governance will establish the level of authority for decision-making, management and execution of a project as well as the structure of the organization, the environment where the project operates and how information will be shared among the key stakeholders.
Next, policies are the set rules and structures that are followed during a project’s lifecycle. Good policies ensure that projects are completed on scope, schedule and cost. When developing the policies, it is important to focus on the interest of the organization, the needs of the stakeholders, competency, and good project management practices.
Finally, well set procedures will accurately detail ways of executing project activities. The procedures developed for a PMO enable it to follow uniform standards for managing projects, as well as create a deep project repository, which can be used as a location for recording lessons learned and other historical information as necessary.
In order to support the procedures, it is important to have and follow project artefacts. This could include the use of templates, checklists, and forms; however, it is vital that the guidelines on how to utilize them are followed.
5. PMO Leadership
According to research, most PMOs fail due to a lack of effective leadership. As the demand for mature and successful PMOs continues to grow, the need to develop the correct skills for the leadership team is of extremely high importance. A skilled PMO leader can act as a catalyst for maturing the success of a PMO.
Without focused PMO leadership, a PMO can struggle with its identity and its role within the parent organization. It is important to set the expectations from the PMO leadership group early and maintain the support of executive sponsorship throughout the life cycle of the PMO.
It is of course important to know that these are not the only challenges faced by PMOs and that to ensure the success of a PMO, it is important to establish a clear and concrete strategy with measurable objectives aligned with organizational goals.
In addition, executive sponsorship and support are essential to provide the necessary resources and authority for PMOs to achieve their objectives. Furthermore, an ongoing commitment to continuous improvement is essential for PMOs to stay relevant and effective.
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PMO Global Institute Inc. is the global body for PMO certifications, representing global project management offices including project, program, and portfolio managers involved in defining, establishing, and running high-performing Project Management Offices (PMOs) in and across industry sectors.
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