Office politics

The Project Management Office (PMO), or the department that defines and maintains standards relating to project management, is an established part of the organisational make-up. But as Paul Rayner ProgM SIG reveals, the role, size and scope of the PMO is far from clear cut.

Currently there is great interest in PMOs and portfolio management. Yet almost everyone appears to have a different idea about how they should be organised and about the value they bring. There is even confusion about what the letters PMO stand for: does the P stand for project, for programme or for portfolio? And does the M mean that the Office is actually responsible for management or merely for providing support and assistance? And what should the Office actually be doing?

This confusion and uncertainty led ProgM, the APMs specific interest group for programme and portfolio management, to examine the subject. This investigation and the research of others, suggests that there are few definitive standards for PMOs and that the practical experience of those who work in them is decidedly mixed.

To gain further insight, ProgM undertook a survey at the APMs Knowledgeshare conference held in May 2009 to understand current practice. Subsequently, the survey was extended to all APM members that had expressed an interest in programme management. The results are consistent with those of research from Cranfield University School of Management. They suggest that PMOs are essential to the success of programmes and portfolios, but are frequently unappreciated and are often the victims of corporate politics.

How big should a PMO be?

The majority of respondents to ProgMs survey said that their organisation had a PMO. This matches the Cranfield research, which shows that 70 per cent of major British organisations operate some form of PMO. However, in the ProgM survey, they were mainly focused on supporting programmes and portfolios: only 27 per cent of those working on stand-alone projects believed that their organisation operated a PMO, whereas 65 per cent of those working on programmes and portfolios did.

As one would expect from something that must serve organisations of all different sizes and complexities, PMOs vary greatly. In the ProgM survey, the smallest employed two people and the largest employed 60. What was not so clear was the drivers that lead to larger or smaller sizes. In the survey, the single biggest factor appeared to be the scope of the PMO, with those covering a single project being smaller than those covering a whole portfolio. The average number of people employed in those that served single projects (i.e. Project Offices) was 3.5, whereas the average number in those that served individual programmes (i.e. Programme Management Offices) was 8.3 and the average in those that served a portfolio (i.e. Portfolio Management Offices) was 10.7.

What should a PMO do?

(Above - Fig.1 - Functions performed by a PMO (Percentage of respondents saying yes))

A surprising finding of the ProgM survey was that there was no single function that all PMOs undertook. As Figure 1 shows, even the most common functions, progress reporting and the promotion of programme/project standards, were practised by fewer than 75 per cent of PMOs. A similar uncertainty was identified in the Cranfield research, which confirmed the wide spread of functions and responsibilities.

A possible cause for this variation is the differences in maturity between different PMOs. Many only provide administrative support: they have little strategic importance and are seen as an overhead that can be trimmed down to size whenever there is a corporate economy drive. Some, however, are proactive in reviewing business cases and in managing the delivery of business benefits: they can thus demonstrate that they support corporate strategy and add value and thus justify the employment of adequate staff.

As shown in Figure 1, only 25 per cent of PMOs in the ProgM survey were involved in benefits management. Almost all of these supported a programme or a portfolio, a pattern consistent with the view that the purpose of projects is to deliver their products, whereas the purpose of programmes and portfolios is to help realise business benefits.

Portfolio Management

The ProgM research also covered portfolio management. The reported sizes of portfolios varied enormously, from three programmes/ projects to 400 programmes/projects, but the survey results showed no correlations between the size or coverage of the portfolio and the size of the PMO.

What both ProgMs investigations and Cranfields research show is that portfolio management is a very different type of activity to the management of projects and programmes. Whereas the latter are discrete and temporary structures that are expected to finish and hand-over what they create to the business-as-usual operations, whereas portfolios are ongoing and thus their management must be part of the organisations permanent business-asusual structure. Accordingly, the skills and capabilities required to ensure the success of portfolio management tend to be different to those required for success in project or programme management.

Inevitably, the creation of a portfolio management operation will take power and responsibility away from existing departments, such as finance. Furthermore, a key objective of portfolio management is to impose a discipline on the selection and prioritisation of funding for projects and programmes, and this may upset senior management who are used to operating in a less formal manner. As a consequence, portfolio management must often fight for survival within the vicious cross-currents of corporate politics. Cutting the size of the PMO in the interests of economy is an effective technique for limiting the impact of portfolio management. This appears to be one of the key reasons why, in spite of the tremendous potential benefits that portfolio management can provide, it is often deemed to be unsuccessful.

How valid are these findings?

Although there was no scientific approach to selecting those who took part in the ProgM survey, a high-level analysis shows that the pattern of responses is typical of those interested in programme management and related activities. The respondents indicated that they worked on a range of initiatives projects, programmes and portfolios. However, the majority regarded their initiative as a programme, as one would expect from a group who had expressed particular interest in programmes management.

The survey respondents were spread across all business sectors, with 44 per cent coming from the public sector. This pattern is consistent with other surveys of programme management professionals undertaken by ProgM.

The purpose of the initiatives on which respondents worked also varied, with 27 per cent being deemed construction/ civil engineering, closely followed by organisational change/restructuring/process redesign with 25 per cent and IT/software development and new product-service development, both with 18 per cent. This spread is generally consistent with anecdotal evidence about where portfolio management and PMOs are used again indicating that the sample was representative.

So what?

ProgM believes that the prevailing uncertainty about the roles, functions and organisation of PMOs and portfolios creates problems of communication, slows down the spread of good practice and limits the effectiveness of these management structures. Furthermore, ProgMs investigations strongly suggest that anyone considering creating a PMO should be very clear what they expect it to do. In particular, they should develop a robust business case showing what is needed to do the job properly, what the critical success factors are and how the organisation will benefit as a result. In short, they should go about it just as they would with any other programme of organisational change.

Similarly, anyone who works within a PMO should ensure that they are always able to demonstrate the benefits that they have helped to deliver to the organisation. Through this, they should seek the highest possible levels of sponsorship and should continually communicate to all the value that they bring. They should also accept that there are no simple formulae, no methodologies and no magic bullets that will lead to success. Instead, the roles, responsibilities, functions and structure of each PMO must be tailored to the exact circumstances of the organisation that it is intended to serve.

However, there is a source of help. Related research from Cranfield shows that the biggest single differentiator between organisations that regularly succeed with their projects and programmes and those that dont is the readiness to transfer lessons learnt. Thus, conducting lessons learnt exercises, distributing these lessons throughout the organisation and exchanging them with fellow professionals can help to illuminate the road ahead. ProgM would be pleased to help any project professionals that need assistance in doing this. In the process, we hope to be able to clarify best practice in this field and reduce the current confusion and uncertainty.