3 Best Practise Tips For An Effective PMO

PMO

The challenges of delivering IT projects on time, on budget and on spec have been a major concern of CIOs, Finance Directors and their boards since the day the first computers arrived in the first offices. What has changed since those days of dot matrix printed invoices is that familiarity with, and expectations of IT have grown and global economic factors mean that the FD and the board now want to see greater returns on their investment.

Those three elements of time, budget and meeting the original specification (whilst adapting to evolving business needs) are the “key three” causes of value leakage during the lifecycle of a project and with the right management they are totally preventable. More and more businesses are now developing project management office (PMO) strategies to ramp up project delivery in relation to the “key three” and those that have – have actually seen their project costs fall, early delivery and integration through increased efficiency.

The concept itself is not a new thing, but the momentum towards adoption of a PMO is hot breaking news. Don Christian, a partner at PricewaterhouseCoopers is quoted by CIO.com as saying “More people lately have been talking to me about PMOs than they have in the last 10 years.” So how do you get the best out of your PMO?

1. Be Clear On What A Project Is

This goes beyond setting the goals, parameters and budget of the IT project – before you even engage your PMO make sure that what you’re asking them to manage is actually a project. It’s amazing how many IT projects I see veer off course because the project management team were too diluted often managing “projects” that were not really projects in the first place – they were straight business decisions or easily implemented changes.

The quirky illustration I give for this is; picture yourself away on business and sitting down to a hotel breakfast. The waiter presents you with a plate of bacon, sausages, black pudding, fried eggs, tomatoes, baked beans, scrambled eggs, hash brown, mushrooms, toast, and a slice of fried bread. What to eat first? What’s best to save for last?

There are 39,916,800 different sequences in which you could eat the food from this plate, if you started trying each sequence on your 21st birthday you’d have to live to 97 and do nothing but eat breakfast. Mathematically, on paper, it’s complex – but in reality you just tuck in and it’s like that with some IT “projects”. Don’t let your PMO sweat the small stuff.

2. Training, Training, Training & Training

ESI’s Project Management Talent Survey 2014 Report claims “Just five days of annual training leads to an acceleration of proficiency”. In their white paper ESI quantify the return on investment (ROI) of training newly hired staff at 500%, and it’s not just the fresh recruits who benefit. According to ESI’s 2012 ROI survey, more seasoned employees enjoyed a 10% productivity boost. Just 60 days after project management training customer satisfaction rose by 8.5% and of the trainees themselves – 66% reported some form of training-related job performance improvement.

Now, of course, ESI facilitate project management training so you could (rather cynically) argue that they were bound to come to such conclusions, but think about when you received some “on the job training” and remember how buzzed, motivated and efficient you were immediately afterwards and you will start to see the truth in the stats.

There are problems with training your PMO talent to be the best. You have to keep training them to keep them the best and more significantly the better they become the more attractive they are to larger organisations offering greater salaries. Indeed, training a graduate to manage small low risk projects can add £8k to their salary potential – train your talent to manage large, highly integrated projects and it more than doubles their salary potential from an entry level just short of £30k to £63.5k.

According to a study conducted by IDC, the loss of new talent can cost businesses between £9,300 and £25,000 a year but with proper structured PM training 69% were more likely to stay over three years. You can train them but you might not be able to keep them. In these times of commoditised IT and everything as a service (“**aaS”) you might consider buying in your Project Management Office as a Service. At least PMOaaS takes the training and talent retention issues off your list of concerns whilst still delivering the improved efficiencies.

3. Right People For The Right Project

Sounds obvious right? You give the project to the best equipped member of your team. Problem is, many IT departments are facing a problem finding the right people due to the explosion in demand for Project Management talent. The ESI Project Management Talent Survey reports that entry level workers need 2 years on small projects to become fully proficient – if you are starting your Project Management Office from scratch staffed with freshly graduated project managers you do run the risk of not meeting budgets and timescales. Does your business have the capacity to run a PMO not at 100% efficiency for two years? It’s a luxury that not many organisations have.

When projects become more complex that timeframe expands – medium sized projects would need managers with 5 years under their belt and larger projects need 7 years. Most respondents to the ESI survey estimated that new hires would only need six months to become fully effective across small, medium AND large projects. That gives you an illustration of the gulf between IT department perceptions and the reality in the view of the training industry. The other thing to consider is that to have the right people in the right place working on the right project becomes more expensive as the complexity of the projects they have to manage increases.

Your PMO will have downtime and if the PMO talent on your wage bill is experienced and well remunerated that can really eat into the efficiencies won by having a Project Management Office in the first place. Freelance Project Managers is an option, but you do feel that you have less control or you could again consider outsourcing your PMO-as-a-Service.

andrew buxton

Andrew Buxton is Business Development Director and also a co-founder of Stoneseed. He has more than 20 years' IT industry experience, working with medium and large organisations designing Intelligent IT sourcing models. Andrew works directly with CIOs to help them address critical IT needs, creating business framework models for change to balance the delivery of key IT services with on-going budget challenges.