Project Management Leadership Grows Up

After a decade of struggling for resources, authority and recognition, the project management office (PMO) appears to have finally earned the respect it deserves.

A benchmark study by PM Solutions, ?State of the PMO 2010,? indicates that PMOs have entered a remarkable breakout phase in terms of maturity and influence. More than half of these organizations now report to the highest levels of management; and, even more gratifying, their value to the organization is unquestioned.

No wonder. According to the study, PMOs reduced the number of failed projects by 31 percent, delivered 30 percent of projects under budget, demonstrated a 21 percent improvement in productivity, delivered 19 percent of projects ahead of schedule, and saved companies an average of $567,000 per project.

Yet, if you are a PMO leader, now is not the time to rest on your laurels. Forrester Research suggests that it?s time to move forward, stating, ?The next-generation PMO must create a flexible framework that fosters the investment process, [must] manage multiple types of work, adopt lean techniques, and provide tools and support that adapt well to increasingly agile environments.?

The mature, strategic project management offices in the PM Solutions study report that, during the next year, they will be tuning up the core processes that enable PMOs to add value to their organizations.

Here are their top three priorities:

1. Improve resource planning and forecasting processes (64 percent). Having inad-equate project management skills is the top resource management challenge cited in the study. Some PMOs report using contracted resources to help them handle this and other resource management issues.

That?s a smart strategy because it can bring personnel and processes up to speed more quickly, while simultaneously educating employees. Since only people can pull off projects, it?s critical to optimize your employees? skills.

2. Implement/enhance core project/program management processes (59 perecent). The majority of PMOs work on high-value strategic tasks: 72 percent implement or manage the governance process, 64 percent advise executives and 62 percent participate in strategic planning. Nevertheless, the wise PMO leader never forgets that the PMO?s value is rooted in an excellent project management practice.

A follow-up study on recovering troubled projects, released in February 2011, shows that companies with a project management methodology in place are far better at turning around failing projects. That?s partly thanks to portfolio and governance processes that allow them to identify problems early in the life cycle.

3. Implement/enhance reporting, analytics, dashboard tools (51 percent). Today?s PMO is looked to as a resource for understanding how the company is doing: 67 percent manage a port-folio dashboard or scoreboard, while 72 percent track portfolio performance. Since information is the lifeblood of portfolio management, getting the right data, subjecting it to wise analysis, and presenting it to executives in a way that speaks to their concerns is paramount for PMOs who wish to cement their strategic role.

We expect to see continued growth in the strategic value of the project management office, especially as portfolio management gains more traction in the enterprise. The strategic PMO leaders in the PM Solutions study are preparing for this by looking to their foundations, as well as by implementing and enhancing performance measurement and governance processes. In fact, 49 percent of the study respondents list these processes?which support excellent portfolio management?as priorities for this year.

Of course, these objectives can?t be reached overnight. It takes consistent, targeted training; continual process improvement; and sustained, demonstrated success to establish a mature PMO that reliably affects a company?s bottom line and other important measures of organizational health.

The expanded role for the PMO in creating and implementing training programs?65 percent are involved in measuring project manager competency, and more than half have training programs in place?bodes well for a workplace where lean and agile practices will provide a competitive differentiator for the organization.

J. Kent Crawford, PMP, is CEO of PM Solutions, a specialty project management consulting firm. You can download the ?State of the PMO 2010? and ?Strategies for Project Recovery? research reports at