The Million-Dollar Question: What's the Value of a PMO?

Well, as they say at the races, Ils sont partis! ... the gates are open and the horses are away: the PMO of the Year Award competition is off to a running start. Already I am getting questions from prospective applicants, and from some of last year's applicants who are ready to try again. One fellow asked me if I could tell him where his organization stood in the rankings, which isn't really an answerable question, since we didn't sort or rank below the top six or so who formed the pool from which we chose the winner and finalists. (This is by way of saying, please don't write and ask me this question!)

What I could do, and what was interesting, was to glance at the evaluation form that had come back from the judge. His PMO had scored high in almost every area; but the area where the judge had reservations was whether or not the PMO had business impact on the organization as a whole.

And, there it is in a nutshell: whether your PMO is a winner or a loser (and I am not just talking about the award here) all hinges on business value and/or perceived organizational impact.

I say perceived because I think that many PMO directors still have not realized that there's a large component of marketing communications, not only in establishing a PMO, but in institutionalizing it. I've written before that PMOs are vulnerable to their own success: once the systems for executing strategy through well-run projects are in place, it's tempting to think you can rest on your laurels. But, no such luck. When project and program management is working well, it's invisible: nothing bad happens. And the PMO becomes, apparently, a line item of overhead.

So, the perennial question PMO directors have to answer is: What have you done for me lately?

Implementing a measurement program within the PMO that tracks the benefits provided can provide those answers, but only if it's wisely designed. Too often, PMO leadership self-measures by metrics I can only call navel-gazing: numbers of people trained in PM, schedule compliance, numbers of project completed, and the like. They forget that a key piece of their role is as liaison with the executive level, and their metrics need to measure things that the executive level cares about.

So, you trained 100 people and they got their PMPs. So what? Aaron Coffman at American Power Conversion (a 2006 award finalist, mentioned in my last post) matched PMP achievement with dollars earned or saved due to projects being delivered on time. Bingo!

It's not always about money, of course. The 2007 winner, Norton Healthcare, succeeded in large part because the PMO made sensitivity to the needs and concerns of clinical staff paramount. "How will this impact hospital staff?" was a central question involved in selecting and prioritizing the portfolio. Consequently, they have been able to pull off massive capital building and technology projects without ticking off the doctors who run the place ... in fact, making themselves indispensable.

So, helping the executive level to perceive the value of the PMO is an exercise in walking a mile in non-project management shoes. What are the drivers of value in your organization? Answering that question is a good place to start.

Join us for more along this same line at our Webinar, Unlocking the Value of Your PMO, next Thursday, March 11. "See" you there.