One of the most valuable but least talked about benefits that project management offices (PMOs) can offer is customer service.
In the non-PMO world, customer service is something that’s tied to sellers focused on scooping up all kinds of customers, trying to swell their revenues by attracting any and all possible buyers for their products or services.
PMOs should behave the same way, but they should emphasise cost reduction rather than revenue, and relentlessly deliver value rather than focus on acquiring customers.
PMOs are service entities that sell their products and services to customers – the governance framework, divisional PMOs, project teams, and importantly, the business and IT department (the originators of projects).
What PMOs should not be are sellers of process, particularly complex process. And here’s why. Focusing on process is a bad idea. It’s guaranteed to ensure your PMO is viewed as a costly exercise, too focused on compliance and never quite able to perform and deliver value to the business.
And lack of performance is a big problem for PMOs. We’ve seen many PMOs who agree to adopt models of ‘all things to all processes’ which then proliferate across the project portfolio management (PPM) environment.
Their forlorn hope is that this will satisfy everyone. In practice, they end up satisfying no one. PMOs that add value work hard to deliver only that which is project-related and concentrate their efforts exclusively on delivering products and services to their customer segments.
This is where they most directly add value; it represents the ultimate payoff enabled by the leadership they show and the influence they develop through their relationships.
Traits of effective PMOs
Effective PMOs have but one raison d'être – to improve the lot of, and make life easier and more productive for, their customers. To do this, they must offer a clear, well-articulated value proposition — a simple statement of the benefits that the PMO provides, along with the approximate price it will charge each customer segment for those benefits.
Successful PMOs deliver concrete, observable value as a direct result of the products and services they deliver to their customers. These drive a range of valuable outcomes such as better project execution, more value, objective value-based investment decisions, effective governance, and greater project environment productivity with less risk and dramatically reduced cost.
They also segment their customers by product or service and then sell (or provide) solutions that meet the requirements of those segments. The reason for this is simple - all PMO customers are not created equal and have different needs.
It’s pointless talking to senior members of a project investment committee about execution matters when really their interest lies in ensuring that project investment drives competitive advantage.
Similarly, offering a project investment model to the head of the portfolio delivery group becomes redundant as by that stage, the investment decision is fait accompli. Project managers, for example, want specific methodologies and tools that make it easier for them to deliver their projects.
It’s important that the PMO targets the products it sells at the right customer segment. Taking a scatter gun approach is often why PMOs are process-driven, costly and can, on occasion, hinder the project investment, execution and value realisation effort.
By standardising and right-sizing their solution offering, PMOs effectively lower project environment and individual project overhead while intensifying or expanding their relationships with their customers.
Building a strong framework and cost model
The fundamental challenge of PMOs is that, whilst important, a strong value proposition will only take them so far. What’s needed is a set of best practices bundled as products and services, integrated within a strong framework (the PPM operating model).
This ensures that the entire PPM lifecycle – project investment to execution to value realisation – benefits the organisation.
In this way, modules of capability or product can be sold to various PMO customer segments based on requirement – cost effectively, with inbuilt and highly streamlined processes, business rules and reporting standards.
PMOs represent an overhead and it can be an expensive one. Gartner and McKinsey seem to agree that an 8 per cent PMO “administration” cost per project or program (in the form of governance, methodologies, tools and leadership) is best-practice.
The average in most Australian PPM environments is somewhere between 18 to 45 per cent so it’s understandable that many c-level executives, especially CIOs, see PMOs as too expensive.
By selling streamlined, highly efficient modules (solutions) from within the operating model, project environment overhead dramatically reduces.
Once PMOs adopt a customer service/product approach, defining the cost of their products and services helps to build an understanding of the value PMOs deliver. It changes the executive dialogue from defending those costs to a discussion of the value they deliver.
Developing powerful PMOs that provide solutions and products to valuable customers is much more a management and organisational challenge. PMOs need to demonstrate that projects will be executed properly and customers will perform better as a result of their guidance.
Clearly, getting the right products and services to the right customer segment in the best way dramatically improves the value PMOs offer to an organisation. PMOs need to sell their value to customers – efficiently and at the lowest possible cost.
There is a balance point where PMOs offer exactly what customers want and will pay for. They simply can’t do this by merely delivering process.
Corinne Forrest is head of PPM strategy and Matthew Rowe is head of IT strategy at PPM Global Consulting.
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