Why You Need a Project Management Office

Why You Need a Project Management Office

The Lines of Authority

To improve the chances of delivering quantifiable results, CIOs might be tempted to create strict PMOs that wield unwavering power over project management. People who have experience with PMOs caution against the tendency to create an entity that is primarily administrative, with roles centred around either approving and rejecting projects, or auditing projects for compliance to processes and metrics. "A PMO has to be instituted in a way that doesn't fly in the face of the culture," says Handler. A PMO that is too bureaucratic or rigid in terms of time tracking and the use of project management tools may reek of Big Brother. At The New York Times Company, a PMO founded to tackle IT issues surrounding Y2K was disbanded in January 2000 once it completed its mission. In mid-2000, the publishing company launched a virtual PMO with a decidedly different approach. The first PMO was "centralised with an iron fist", says vice president and CIO Michael Williams. "Every task was reported, which was fine for that exercise, but it really wouldn't work in our culture. After Y2K, we adapted a new PMO to our collaborative culture." The current virtual PMO offers project management guidelines via an intranet.

The history of the PMO at The New York Times demonstrates how important it is to decide up front what kind of PMO best suits your organisation, whether consultative or centralised (see "How to Start a Project Management Office", left). Raynor of Data Analysis & Results says the consulting model - where the PMO provides ongoing support for project managers in business units - works well for organisations seeking either small gains in efficiency, minimal start-up risks or both. "The consulting model fits into an organisation's continuous improvement plans," he says. At The New York Times, project management director Janet Burns is the sole full-time employee of the project management office; her role is to provide project managers with all the information they need to run a project without contacting her personally.

That's the case at OHSU, where the PMO's role as a facilitator lends itself to incremental improvements. "We're not looking for dramatic changes because they take too long," says Kocon.

The centralised approach, typically marked by hands-on control over projects, is most effective at organisations where the PMO regularly interacts with senior executives and has the power to cancel and prioritise projects. At risk management company Assurant Group, 20 project managers work in the PMO under the ultimate direction of former CIO John Owen (who is now the COO). Using well-defined software development and project management methodologies, the PMO works with business units on every aspect of project management - from defining initial requirements to post-implementation audits. Maintaining consistent processes across the organisation enables Owen to break down projects into manageable components and thereby minimise failures. Centralised PMOs have a higher risk but also promise bigger benefits. In four years, Assurant's PMO has resulted in a 97 per cent success rate based on projects meeting schedules and budgets.

Responsibilities of PMOs range widely, from providing a clearinghouse of project management best practices to conducting formal portfolio management reviews. A PMO's oversight need not be limited to project development or even IT. At Burlington Resources, a Houston-based oil and gas company, vice president and CIO Rick Diaz gave the PMO responsibility for coordinating and tracking both projects and services. The PMO monitors IT's performance on service-level agreements. "This is unusual, but it gives me a single point of control and coordination that works for us," Diaz says.

Coming up with a PMO that works for any given organisation is an exercise in both customisation and patience. When it comes to establishing a PMO, there are no road maps to follow, benchmarks to shoot for or metrics against which to measure. The most effective PMOs are those that reap improvements over time and continuously push the IT department to improve on its performance.

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