May 26, 2010

New Benchmark Study on the Value of the Project Management Office Reveals Increased Maturity Can Drive Upwards of $500,000 in Savings Per Project*

GLEN MILLS, Pa. (May 26, 2010) — Project Management Offices (PMOs) have entered a remarkable breakout phase in terms of maturity and, consequently, overall value to the organization. According to PM Solutions’ benchmark study on the “State of the PMO 2010,” PMOs decreased failed projects by 31%, delivered 30% of projects under budget, demonstrated a 21% improvement in productivity, delivered 19% of projects ahead of schedule, and saved companies an average of US$567,000 per project. Not surprising, the new research also reveals that more than half of PMOs now report to the highest levels of management, with 29% reporting to an executive vice president and another 27% reporting to the C-level.

PM Solutions surveyed 291 high-level project management employees from large, mid-sized, and small organizations in various industries including manufacturing, healthcare, technology, finance, and government. The primary purpose of the study was to gain a clearer understanding of current PMO operations such as size, functions, staffing, challenges, performance, and maturity. Of the organizations surveyed, 84% have a PMO in place, demonstrating a steady growth from 77% in 2006, and 48% in 2000.

For the first time, however, the value of the PMO is no longer in question. According to the study, 83% of research respondents report that the value added by the PMO goes largely unquestioned, with that figure rising to 94% among those with mature PMOs.

“It has always been very difficult to quantify or adequately measure how PMOs are impacting their organizations because the feedback was often vague and intangible, but this year’s study shows precisely how valuable and pervasive a PMO can be today,” said J. Kent Crawford, PMP, CEO of PM Solutions and former president and chair of the Project Management Institute (PMI®). “Now there’s no question – a mature PMO can affect an organization’s bottom line.”

The full report, now available at www.pmsolutions.com/research, identifies three key factors that are playing major roles in the current state of the PMO:

  • the growing strategic value of the PMO;
  • the increased role of the PMO in training; and,
  • the ever-present challenge of resource management.

“PMOs are rising in organizational impact,” added Crawford. “We are now beginning to focus PMOs on demand management to continue delivering strategic business value’.”

Additional findings suggest exciting new growth opportunities for the PMO as it continues to mature. PM Solutions’ ‘State of the PMO 2010’ research shows that mature PMOs are training less in the basics and more in advanced skills and leadership practices, thus preparing their staff for the next phase of PMO development. In fact, the majority of today’s mature PMOs work on high-value strategic tasks such as implementing or managing the governance process (72%), advis­ing executives (64%), and strategic planning (62%). With the demonstrated impact on corporate finances, these tasks are expected to expand.

“We advise our clients to concentrate on four key areas as they mature their PMO operations: enable effective governance practices, optimize the portfolio of projects, centralize resource management functions under the PMO, and measure the value the PMO adds to the business. These are the things that tie strategy and projects, and evolve the PMO to be the strategy execution engine of the organization,” concluded Crawford.

About PM Solutions
PM Solutions is a project management firm helping organizations execute, govern, and measure their portfolios to improve business performance. We are the leader in applying project and portfolio management processes and practices to drive operational efficiency for our clients. Our comprehensive offerings address organizational improvement, project execution, and learning and development delivered through our training arm, the PM College® (www.pmcollege.com). PM Solutions serves a diverse client base that includes some of the world’s leading organizations. For more information, visit www.pmsolutions.com.

*Based on 291 survey respondents across various industries and organizations.