Companies, for the most part, dread redundancy. After all, downsizing is just a euphemism for fighting redundancy, but unfortunately good intentions only go so far.
For example, within a large company it is quite possible for two separate yet identical e-commerce initiatives to exist, one driven by marketing and another by IT. By the time this redundancy is identified, it is often too late to right the listing ship and millions of dollars vanish down the drain. What, if anything, can be done to help companies monitor the myriad of internal projects?
At the recent Project Management 2000 symposium in Toronto, the issue of establishing a project management office (PMO) to shepherd projects was discussed, in presentations and in separate interviews. But like any issue dealing with control, there is disagreement as to whether setting up a PMO is necessary.
What exactly is a project management office? It is a person or group of people who are the base of operations for all corporate project management initiatives. The PMO helps the organization define the tools and processes that will best help the company achieve its strategic objectives.
Depending on how a company is set up, these people will report directly to the CEO or senior executives to keep them up to date on the status of projects.
does your company need a PMO?
“PMOs are OK, if they are put together for the right reason,” said Ken Hanley, a principal with KPMG Consulting in Calgary. “If you can’t put it in a business context, why are you creating a PMO? You are creating it for the wrong reason,” he added.
“Too many companies set up PMOs because that is the cool thing to do…they have become, unfortunately, fashionable,” he said, adding, “people leap to the PMO conclusion before really understanding the problem they are solving.”
Hanley outlined a strategy to determine if your company needs to set up a PMO.
“Is your success largely measured by how well you can execute projects?
“If you are a project- more than a process-organization, if you are at the point where your revenue depends on successfully executing projects, then you had better invest in something like a project management office,” he said.
Systems Xcellence Inc. is a Milton, Ont.,-based on-line software solutions provider for the healthcare benefits industry. The company grew from several dozen employees to about 200 in a five year period, yet had a project management office from the onset. For them the success was dependent on ensuring projects were delivered on time and, most importantly, on budget.
“[This is] a key thing for a small Canadian company since our life blood is dependent on cash flow,” said Norman Humphreys, director of quality and control for Systems Xcellence. He said the company had two people in the project office at the start and still has just two, even though the number of concurrent projects has expanded dramatically.
Humphreys said it is important for the PMO to stay neutral. “You have to be respected to give an unbiased view.”
This is central to a PMO’s success. The members have to be viewed as part of the solution, not part of the problem. Hanley said the PMO should be occupied by people who not only help the organization but also have the responsibility of delivering projects themselves.
“If you get a group of people who are just oversight for everyone else, they are the project Nazis and everybody will try to ignore them.”
On the other hand, not everyone thinks that PMOs are even necessary.
“The problem is that project management offices are goofy, in my view, in that I have never seen one speed up the project,” said Rob Ford, senior consultant at Quokka Systems Consulting, project management consultants based in Vancouver.
“Why have a project manager’s office, why not have a bunch of project managers report to the CFO or CIO,” he said. “I don’t understand the project office thing. As far as I can understand, those people [are] divesting themselves of hands-on responsibility.”
And if you are thinking of outsourcing the PMO, Ford has a few words of advice. “If you outsource your PMO, this is fox in the henhouse, folks.”
not for everybody
Jason Martin, principal at Navantis Inc., a Web development company in Toronto, sees the PMO as either a potential blessing or a waste of time.
“[PMOs] are an awesome idea, I wish those of us in small- to medium-sized companies could afford that luxury.” A PMO can help manage the workload assigned to each individual, but the office could also just add another layer of bureaucracy.
And, as much as Ford is not a champion of PMOs, he does see them being potentially useful. “If a PMO can identify redundancy, redundant projects or overlapping projects and have the power to put the projects together then [it could work], otherwise it will just slow you down.”
Hanley said companies may benefit from PMOs in part because the industry requires exceptional foresight and organization for future projects. He cites, as an example, a large telecom-type company which might, three years from now, be generating 50 per cent of their revenue from projects that do not exist today. A PMO can help keep all of this organized and focused.
But Hanley warned that some should not be in charge of the PMO. “I hesitate to have IT take leadership in a project management office environment,” he said. “Given our (IT) success rate in projects, why in the hell would they put us in charge of defining the standards for everybody else?”