62. PMO performance – make sure you are measuring success

PMO value imageA common argument from project managers and senior management is that a PMO does not add value and creates burecracy.  This than can make it very difficult for the PMO to make progress, which results in limited value that can lead to the PMO being closed.  Obvious choice if you are a senior management, why would you continue to invest money that can be used elsewhere?

 

What can the PMO do?

To mitigate this risk, the PMO needs to be able to demonstrate the value they are providing. Unfortunately, while easy to say (write), not always easy to do!

Step 1

Spend some time thinking about the objectives of the PMO (why it was set up).  This could be a number of reasons such as

  • reduce the number of projects that deliver late
  • reduce the number of projects that over spend
  • improve the level of benefit realisation
  • provide transparency of the change projects
  • improve the quality of reporting / standardise reporting
  • implement a common project methodology
  • etc

Step 2

For each of the major objectives, work out what measure could be used to prove that the objective has been met.

Taking the example reduce the number of projects that deliver late.  A measure could be to take the previous years projects and calculate how many finished late i.e. 40 out of 100.  This equates to 40% of the previous years projects finished late.  You may even want to take the average for the last 3 years to give a more accurate view of a typical year.

The next step would be to perform the same calculation for the current year.  If the percentage finishing late is less than 40%, you can demonstrate that you have achieved the objective.

This is only a simple example and is what is termed a trailing indicator – you only know if you have achieved the objective after the year has finished!  It would be far better to have a monthly process to track forecast project end dates as this will allow a prediction of the trend.  The PMO can then manage the monthly trend.

As this demonstrates it is important to achieve high quality, meaningful objectives and then spend time creating appropriate measures.

Step 3

Create a process to capture and track these metrics on a regular basis.  For example, as part of the monthly reporting process, ensure that the data is captured, stored and analysed.  The analysis is very important, if you don’t analyse the trends, you will not know if the performance against the objective is improving of deteriorating meaning you will not know if you need to take corrective action.

Step 4

Report progress on a regular basis.  This is obvious, all the hardwork has been put in place to define the measure and measure progress, taking action where required.  This is also the crucial part to solving the problem of demonstrating the value the PMO is adding.

Invest the time in building some good dashboards that show the output of the regular analysis.  This includes clearly showing how objectives are being met.  By reporting this data on a regular basis to senior management you will:

  • build credibility that you are in control
  • demonstrate you are being honest and transparent
  • show on a regular basis you are delivering value – “doing what you said you would”
  • removing the risk of the “big reveal” – where benefit is only demonstrated at the end

Conclusion

In many cases stakeholders and senior management like a regular news flow to show incremental benefit.  They can see progress is being made as opposed of having to wait (and hope) that benefits will be delivered at the end of the project, especially when if they are not the money and time has been spent and there is no refund!

Getting the right measures in place and reporting against them is something every PMO should strive to achieve and, if you can deliver against them, be very good for the career.

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About Simon

Founder of practical PMO with a passion to share insights on designing and building practical, pragmatic PMO's. Posted by Simon Wilkinson, PMP

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