PMOs: New Research Shows Benefits Outweigh Cost

This blog was updated in May 2025.

A quarter-century of working at the intersection of publishing and project management has taught me that, in at least one crucial way, project management mirrors editing: when it’s done exceptionally well, it becomes almost invisible.

Perfect project delivery translates to... nothing bad happening. To the outside world—executives, end-users, you name it—it’s like pure magic: your shiny new product, seamless event, or impactful initiative simply appears. No crises erupt, no red flags wave, no excuses are offered, absolutely no problem. As an editor, I’ve often heard writers remark, “You barely changed a thing in my article!” when, in reality, I’d invested hours meticulously tweaking and refining. So, believe me, I empathize with the project management team whose excellent work might seem effortless from afar.

This very dynamic, I believe, was a significant reason why, in the initial decade of PMO implementation within organizations, we witnessed many PMOs losing momentum or, more critically, their funding after just a couple of years. For project managers, this was understandably frustrating. “But we were achieving such great results!” they’d rightly argue. Yes, and that might have inadvertently been the issue. Two solid years of consistently improved project delivery, and the financial decision-makers would inevitably ask: “Why are we allocating this budget to a PMO? We aren’t experiencing any significant problems with our projects.”

This trend was clearly visible in our flagship research study, The State of the PMO. About five years into the research, we observed that the percentage of respondents reporting the existence of PMOs decreased by five to ten percentage points.

Today, however, the narrative surrounding PMOs has decidedly shifted. The State of the PMO 2022 results unequivocally indicate that PMOs have successfully overcome many of their early hurdles. Consider these findings:

• The vast majority of mid-size and larger firms have PMOs in place, and the majority reside at the enterprise level
• The value of the PMO is rarely questioned
• The majority of companies ascribe impressive improvements in projects and programs to the PMO:
  • 64% improvement in alignment between projects and strategy
  • 62% improvement in the number of successful projects
  • 60% improvement in the number of projects delivered on time/onbudget.

And here’s another key point: when we examine the cost of operating a PMO (using the ratio of PMO budget relative to the total value of the project portfolio it manages), the average PMO cost remains at approximately 5% of the portfolio value. Remarkably, this is the same average cost I first identified roughly 15 years ago.

So, what exactly transpired between those struggling PMOs of the past and today’s executive-level powerhouses? I’m guessing it was a confluence of several critical factors:

• Executives became more aware of how crucial projects are to their bottom line. PMI's intiatives to bridge the gap deserve credit here.
• Project managers got better at communicating the value and importance of their work: they stopped showing executives their Gantt charts and started relating project success or failure to corporate objectives.
• Technology improved, helping us translate project challenges and benefits directly into dashboards, with actionable decision inputs.
• PMOs stopped being the organization's methodology police, trying to teach/correct processes to people they had no authority over. Instead, they brought the projects and the project managers into the PMO and got on with it. The majority of PMOs now manage (hire, train, reward, etc.) the organization's project managers.

So, PMO leaders and project managers, you are operating in a truly opportune moment. However, complacency is not an option. To continue this positive trajectory, it’s essential to continually learn more about the specific actions that high-performing PMOs consistently undertake (and, equally importantly, what they avoid). =

You can delve deeper into these insights by downloading our free executive summary report right here.

FAQs

What are the primary benefits of a PMO?

Improved strategic alignment, higher project success rates, better on-time/budget delivery, enhanced resource management, standardized processes, and clearer communication.

How does a PMO contribute to company success?

Acts as a central hub for efficient project execution, better resource use, reduced risks, and greater achievement of strategic goals, ultimately improving the bottom line.

Can you quantify the benefits of having a PMO?

Research shows significant gains: 64% better strategic alignment, 62% more successful projects, and 60% improved on-time/budget delivery, directly translating to business value.

What is the typical ROI for a PMO?

While varying, a stable average cost of 5% of managed portfolio value alongside substantial improvements suggests a strong positive return through increased project success and strategic alignment.

What are the benefits of a mature PMO vs. a new one?

Mature PMOs offer well-defined processes, experienced staff, and strong support, enabling better strategic alignment and consistent value delivery compared to developing PMOs.

How does a PMO help in managing project risks?

PMOs establish standard risk processes, provide tools, and facilitate risk communication across projects, enabling proactive mitigation and improved project outcomes.

What are the key benefits of a PMO for project managers?

PMOs offer standardized methodologies, best practices, training, and a central support point, increasing efficiency and the likelihood of project success for PMs.