Forrester: The Building Blocks of an Effective PMO

Lewis Cardin has a new 8-page report out (The Building Blocks of an Effective PMO, #45217, dated 8 August 2008) that you might find of interest. It discusses some survey results and runs down PMO general considerations for ensuring they add recognized value. The study breaks the PMO into three functional elements: project office, portfolio/program management office and the PMO as a center of excellence/internal consultancy. I would call this PMO 1.5.

Why not 2.0? It's all good except for continuing to consider only project work/innovation as being within the scope of the PMO. I stubbornly maintain that the IT PMO must have a handle on all IT demand and capacity elements (total work and resource management) if it is to ever achieve effective project management in a matrix, multi-tasking, operate + innovate environment. Not to mention smoothly integrating service and project management disciplines so they play nicely together.

"Mister Gorbachev, Tear Down That Wall!"

It ain't gonna happen on its own folks, so why not leverage the PMO as a centralized point for IT business management across the entire product and service lifecycle? I know, I know, it is the same sad old song from me, but if you just hum a few bars, you will find it to be a catchy tune.

OK, I feel better now. A couple of stats contained in the report are worth ruminating on.

First is that only about half of the organizations (of 233 decision makers surveyed in North America and Europe) even had a PMO. What's up with that?! You would think that by now organizations of any size and significance would have gotten the memo. So, I'm sitting here thinking about why that is, and this is what I came up with off the cuff for hurdles that are preventing a PMO from clearing the fence:

• Too small; you have to get enough staff critical mass (i.e., sufficient confusion) to warrant a PMO. If I had to pin an unqualified number on what that size is, I would say somewhere between 150-to-300 people. Your mileage may vary. If you have over 400 IT staff and don't have a head on the monster, you are way too big to be acting like that.
• Too immature; the organization cannot spell 'process' or 'accountability', and likes it that way.
• Too volatile; operating in a totally ad hoc environment where planning is futile. Bummer.
• Too reactive; the current crisis management routine and alligator wrestling means you can't free up any staff long enough to figure out how to drain the swamp.
• Phobic; strong silos where department heads fear a PMO will threaten their power and autonomy, expose structural weaknesses, or in situations where a PMO has been tried before and failed.
• Anemic; IT leadership is too unwilling/lazy to effect positive change — because after all, change is such a hassle.
• In denial; the organization fails to recognize the benefit or necessity of a PMO because it cannot objectively assess its own situation, and/or the drivers that would trigger a PMO have emerged so gradually that "the frog is now in a pot that is boiling."

The second stat is around PMO effectiveness. This is a bit of a glass half-full versus half-empty situation. The opening paragraph in the report paints the state of the PMO a tad gloomy, so I found it interesting that 93% of respondents with a PMO indicated that theirs was providing perceived benefit (35% at "very effective" and 58% "somewhat effective"), which quite frankly is higher than I would have supposed or recall seeing in past analysis.

Bear in mind perceived PMO effectiveness can be significantly impacted by organizational and environmental factors outside of its span of control. For example, the PMO doing a very good job at providing decision support information may have its image tarnished if that information is not being effectively applied.

Taken in context with the flip side (having only 6% being categorized as somewhat ineffective and only 1% as very ineffective), these are not necessarily a bad set of stats in my book. Don't get me wrong, I would prefer to see those 35/58 numbers reversed, but over a third of PMOs being perceived as rocking and rolling is pretty good, especially if most of the other 58% are also trending in a positive direction (this supposition is not in the report; I'm just saying…).

OK, enuff said — for the 53% of you looking for ammo to get a PMO established, or those who are trying to extend the services of your "somewhat (in)effective" existing PMO, this would be a good report to help load up the business case gun. These numbers basically shout out, "Hey look boss, the odds are strongly in our favor that this whole PMO thing is probably going to be worth more benefit than the trouble it causes."