In today’s business landscape there are many organisations facing a wide gap between what their PMO is doing and what senior management is expecting from them. Unfortunately, more often than not, this misalignment results in the failure of the PMO and serious consequences for the business.
In this blog post we summarise some of our key findings and discussions from our recent webinar, 2022 Strategic Roadmap for the PMO, including looking at the top five reasons why a PMO might fail, and what you can do to ensure your PMO’s success.
5 Shocking PMO Statistics
As you can see from the facts below, there is much to be considered when looking to set up your PMO and Project Portfolio Management (PPM) strategy.
- 50% of Project Management Offices close within 3 years (Association of Project Management) or are restructured;
- Only 58% of organisations fully understand the value of project management (PMI, Pulse of the Profession 2018) or see value in the PMO;
- Only one third of projects were successfully completed (Standish Groups CHAOS report) leading management to wonder what the value of the PMO is;
- 68% of stakeholders perceive their PMO’s to be bureaucratic (Gartner PPM Summit);
- Only 40% of projects meet outcome goals (IBM Change Management Survey).
Now that we know the reality of the situation, it is essential to understand why this is happening.
Top 5 Reasons why your PMO might fail
There are many reasons why a PMO could potentially fail, but in our experience, the most common reasons for failure in an organisation are often not process or technology related concerns, but rather people and change management issues. Here are the top five reasons we see PMOs fail:
- Internal politics, culture & adoption
- It is incredibly difficult for a PMO to satisfy multiple stakeholders who often have differing goals, yet it is expected that the PMO achieves this. Commonly, PMOs will experience resistance to change from many stakeholders, hindering their pace of adoption and ultimately their success.
- Lack of executive support and vision
- Executive stakeholders often think that the PMO’s primary function is to consolidate reports, create templates and coordinate resources. Those who understand the evolution of project management know that there is a lot more to the responsibilities and functions of a PMO and its ability to align the work to and achieve the organisation’s strategic goals. This misconception at executive management level often results in little support and advocacy for the full PMO function. But this relies on the PMO actually understanding that the future is in a strategic led Enterprise PMO, not an inward facing reporting based PMO.
- Inability to agree on a common approach for managing projects
- When a PMO is missing executive sponsorship and is dealing with competing goals, it becomes difficult for stakeholders to agree on one common approach. The resistance that the PMO receives from misaligned stakeholders can be incredibly frustrating and a contributing factor to PMO time management and prioritisation issues. This impacts the organisations ability to delivery their strategic work.
- Shifting business/project priorities
- With the constantly changing business landscape, business leaders and their software solutions need the ability to adapt at any point and effectively shift priorities. This agility becomes difficult when a PMO is already struggling to gain sponsorship and agreement from their executive stakeholders. When the PMO is not focussed on strategy, then even less guidance as to what should be prioritised is available.
- Impact on existing processes & software systems
- Unfortunately when a PMO is lacking organisational support, they typically lack the funds necessary to support a well designed and highly capable PPM solution. Without implanting an innovative and adaptive PPM solution, the PMO will struggle to efficiently unite all previous process and software systems and effectively connect project teams across the organisation in the new world of hybrid work.
How to avoid PMO failure
It is critical that you review the common causes for PMO failure and focus on these areas when establishing your PMO. You must ensure clarity from the beginning on the type of PMO you are establishing and its ongoing focus and responsibilities, both of which should be agreed with the executive sponsor before implementation. Clear understanding of responsibilities, objectives and measurable value to the business can then be defined to ensure that the PMO has a clear alignment to organisational strategy and goals. This joint focus will mitigate confusion and the potential for a silo mentality around authority and expected value. Do you find yourself asking “What does a PMO do?” or “What type of PMO structure is best to establish?”, we suggest reading our following blog post, ‘Which PMO structure is right for your business?’.
Regardless of the type of PMO selected, at the heart of any project management structure, there needs to be a PMO leader who understands the ever-evolving landscape in which the PMO operates. They must continuously evolve their PMO to be a proactive, strategic function aligned to the goals of their organisation, supporting the achievement of both business value and adaptive, continuous, and compliant delivery.
Once you have identified your PMO’s function and focus, utilising PPM tools, like Altus, help you to provide targeted improvements to the way your PMO operates, how you engage company stakeholders, and how you demonstrate your value to the business. Talk to a Sensei PPM expert today to see how we can help you to strengthen the likelihood of your PMO’s success.