Value: Key Term for PMOs

Project Management Offices (PMO’s) are continually being questioned by the C-suite. According to ESI INTERNATIONAL 2015- GLOBAL STATE OF THE PMO, 72% of those surveyed claimed the PMO continues to be called into question mostly by senior management

The three main reasons for calling the establishment of the PMO into question are:

  • Lack of perceived value (44 %)
  • Lack of project/program maturity in the organization (41 %)
  • Lack of executive support (32 %)

In many opportunities, the projects’ success is put on the spot. Classic definitions of project success (on-time, to-budget delivery, quality) are no longer sufficient; projects’ success loses ground without the complementary value generation, and the creation of tangible profits for the business, among other variables. The PMO has to prove its own value, ensuring rigorous project management, which enables their success, foresee and reduce risks, and above all, increase the chances of business value creation through the projects.

Investors and directors authorize the project execution, counting on the corresponding Return on Investment (ROI). Value realization and profit creation should be the central component of the project, program, and portfolio management. They are the means to determine ROI, not only for projects but also for the PMO itself. The PMO must be very clear that its own value depends on the value generated by the projects for the business. Therefore, I recommend three cyclic steps, which we must constantly validate to maintain our PMO alive and successful:

Determine the value for the business: determine what is the PMO’s value proposal, so that projects, programs, and portfolios are able to produce expected strategic results. Expectations shall be validated with all directors involved.

 Demonstrate the PMO´s value: focus on generating expected profits and benefits and determine the PMOs impact on the business, in terms of reducing risk and maximizing the opportunity to obtain real and constant profits. Make sure that those benefits are aligned with the strategy and focused on the business’s goals, like for instance, cost reduction or efficiency increase. Firmly point out each project deliverable and determine how it contributes to the organizational strategic goals. Then again, validate expectations with all involved senior-level management.

Sustainability of Value Generation: What may be critical for the business today, it may not be needed tomorrow. Make sure that every project or program creates benefits, generates value, and is aligned with strategic changes. Make firm decisions in the event that adjustments are required. Again, validate expectations with all involved stakeholders.

With these recommendations, we ensure C-level’s support and we constantly convey the value of the PMO. If you want to be successful with the PMO, focus on the PMO’s value proposal and get all interested parties involved, including executive sponsoring and senior management, to guarantee commitment and support for the project portfolio and for the PMO.

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