If You Want Project Success, Build a PMO That Won’t Fail (Part 2)

This posts follows up on Part 1 of this PMO post:

Continuing on the topic of building a successful PMO, we’ve already covered the tone from the top, your PMO process, and staffing the PMO team. Now I’ll discuss how to properly utilize the PMO to deliver on projects, measure success, and communicate its value to the organization.

Delivering the Goods

Ultimately your PMO exists for one reason: to ensure your highest priority projects are delivered to the highest standards possible. Execution is key.

The role the PMO plays in execution should be focused on getting the right resources to the team when needed and keeping an eye out for danger signs of a project going off the rails. The sooner you know your ERP implementation is heading toward a crash and burn, the better you’re able to avoid that catastrophe. The PMO should be your early warning system for such problems.

The PMO also plays a longer-term role in execution success buy strengthening the talent pool. The PMO can help train your PMs, identify new rising stars, and help recruit the best talent available. When it comes to execution, bringing the A-Team to the game makes a huge difference (although don’t waste your time hiring high performers if you’re not going to properly invest in them).

Now that you’ve delivered on the project, let’s discuss measuring and communicating success.

Measuring Success

Any person working on your projects is typically not going to like this step, but it is critical. In order to monitor projects and measure them against original estimates, you need data. In a manufacturing plant, this data would be a time study. In project management, it is usually a time sheet linked to a project plan.

Worker bees don’t like extra paperwork or “Big Brother” looking over their shoulder, but if we’re going to make better cost estimates in the future, we need to understand the amount of effort required to complete the deliverable.

Despite conventional wisdom, internal resources are not free. Their time can be spent across many projects. To determine the actual cost of a given project, you must calculate internal costs. To do so, you need:

(fully-loaded billing rates) X (time spent working the project)

Leadership support plays a major role in this step. Getting accurate data in a timely manner is critical. This data is very subjective, as we aren’t measuring widgets coming off a manufacturing line. Remember, you are asking someone to enter the number of hours that they worked on a specific task.

Team members need to take this seriously. If they don’t, your data is about as useful as a dead mackerel at a tea party. We all know that every employee doesn’t spend every minute of their day on productive work (although it is a novel idea), but these estimates should provide a solid picture of current costs as well as a baseline cost estimate for future similar projects.

Sure – the data can also be used to measure one team member against another, but this isn’t why we’re collecting the data. I have seen large companies implement enterprise project management tools to manage these plans. I have also seen a simple spreadsheet provide the same results when used consistently. The investment and technology used should mesh with your culture.

Communicating Success (or Impending Failure)

Your PMO should understand the status and risk associated with any project at any given time. This is great information to communicate to your leadership team.

The goal of all communication should be centered on answering two questions:

– Is the project going to finish under the agreed-upon constraints of budget, time, resources and scope?
– Do we believe the major project deliverable will drive the value that we originally anticipated?

If your project is going to cost twice what you originally thought and your original ROI estimates barely got approved, you need more rigor in your project evaluation process. If the project is heading for the cliff, the PMO needs to intervene and will likely need executive management to make some time-sensitive decisions to avert disaster.

Depending on your culture, communications might include monthly reviews, weekly dashboards, etc. You live in the culture and you know what works. Be sure any communications coming from the PMO address the “so what?” for the audience (and if you need to know how to do that, this course can help).

Follow these steps and you’ll be on your way to a high-performing PMO.

What other aspects of a PMO have you found to be successful? What are the major PMO failure points you’ve experienced? Please share!

Photo: The Agile PM Game (Aug ’11) by VFS Digital Design