The Project Management Office: Enabling Change
As we move from the WHY to the HOW of organisational transformation, the Project Management Office (PMO) is emerging as a key driver of change.
Successful transformation requires effective, enterprise-wide project, programme and portfolio management. The PMO is fast becoming the de facto organisational structure for standardising project management best-practice, ensuring that projects and programmes are delivered on time, on budget, with agreed outcomes achieved.
An October 2017 study by McKinsey, covering more than 2,000 executives across 900 organisations, identified the key factors critical to the success or failure of change projects. An effective and empowered Project Management Office was seen as being critical to “leading the change effort and monitoring its progress”. A strong PMO is essential to maintaining the ownership and commitment necessary for a major transformation to succeed.
The State of PMO 2017
Worldwide, it is estimated that 85 per cent of mid-to-large sized enterprises have a PMO in place. Thirty per cent of those with no PMO plan on implementing one very soon.
Similar results have been reported for the UK. According to the State of Project Management Report 2017, published by the Association for Project Management PMO Specific Interest Group, the number of organisations having a PMO has increased from 71 per cent in 2016 to 85 per cent this year.
The main reasons for this increase have been the growing complexity of projects combined with the urgent need to improve project execution and delivery within the context of wider transformation and change management initiatives.
While these are impressive statistics, there is no room for complacency. PMOs continue to face major challenges in ensuring the effective project and programme delivery critical to the successful implementation of change management initiatives:
- The increasing range and growing complexity of projects being managed.
- Unclear roles, objectives, scope and responsibilities.
- Lack of resources.
- Lack of senior management support.
- Poorly trained project managers and project sponsors.
- Inadequate tools and software support.
- Skills shortages, especially in data analytics.
On time, on budget is no longer enough
In addition to the above, the issue of project management performance remains a huge concern despite recent improvements in this area.
According to the 9th Global Project Management Survey 2017, conducted by the Project Management Institute, a positive change has taken place in the way organisations are managing projects and programmes. For the first time in five years, more projects are being completed on time within budget.
However, an estimated $97 million for every $1 billion being spent is still being lost due to poor project management performance.
Fewer than half of the 2,000 executives surveyed in the recent McKinsey study reported that ‘most or all’ of their change management efforts over the past five years had met initial goals and sustained results over time.
As we begin to see a much closer integration of change and project management, the way we measure success may also need to be redefined.
In an era characterised by turbulent change, traditional measures of project success based on scope, time and cost may no longer be sufficient. The ability of projects to achieve what they set out to do, within a wider change management context, has become much more important. Project success measurement should include the realisation of expected business and organisational outcomes as well as more traditional measures.
The implications of this for PMOs will be covered in a new Bridgeall blog series coming soon.