The past couple of years have showcased this significant shift of the role of the PMO. That shift is for the PMO to go from tracking, monitoring and reporting to the management of real business outcomes.
As businesses are defining their goals, they are turning to PMO leaders to drive the value the business expects to accomplish and deliver on those expectations. Ultimately, this gives the PMO a seat at the table to become a crucial value center of a business.
But, how can PMO leaders get there?
In a recent survey specifically designed for PMO leaders, there were some incredibly insightful findings driving the success of PMOs in 2022 and into the future! So, let’s talk about them.
This probably comes as no surprise to other PMO leaders out there, but resource management was cited as the top challenge for PMO leaders today at 48%. Historically, PMO leaders and project managers have struggled to assign the right resources to the right project at the right time. However, with 86% of people stated they don’t have enough resources to meet demand – it begs to question whether the right projects are even in flight! But – how do you make sure that you have the right projects in the mix, well that comes down to prioritizing the right ones. Project prioritization was cited as the second most challenging aspect for PMO leaders.
Let’s take a closer look at resource management and project prioritization as the top two challenges.
First, let’s look at the top challenges related specifically to resource management. The respondents of The PMO Outlook Report – 2022 Edition cited capacity planning as the top challenge followed by resource allocation. It’s encouraging to see capacity planning at the top of that list because it indicates the growing maturity of PMOs and that they are likely overcoming the obstacles of managing external resources, skills tracking and utilization. Growing maturity means organizations are alleviating the pains of basic resource management and are looking at more strategic ways to improve their overall resource management practices.
Secondly, project prioritization continues to be a challenge, but you might be surprised at what exactly PMOs think is the most challenging aspect. 40% of respondents say that saying NO to some projects in the portfolio followed by aligning portfolio projects with corporate strategy. These two are key when we talk about the shift of the PMO focusing more on strategic alignment. Other challenges that are faced in prioritization were accurately scoring the value of the portfolio of projects, modeling scenarios to optimize portfolio value and tracking the value to delivery. Those three areas all in some way relate to those top other two challenges and ultimately as those become more defined the other areas will probably follow suit.
Now you know what the top two challenges are for PMO, but what is making PMOs successful in 2022?
An alarming insight gained from this report showed that how the PMO was being measured doesn’t mirror what determines their success. So let me give you an example. The top way that PMOs are being measured based on this report is delivering on-time and on-budget, but the top indicator that a project has failed is not in fact if a project is delayed or over budget, but that it doesn’t meet stakeholders satisfaction. This highlights the disconnect between business level priorities and project level delivery. These two things should be in sync.
But how are you able to ensure there is strategic alignment between the PMO and the business?
It all starts with identifying those critical business initiatives. Once you have those identified, the PMO can look at prioritizing your most valuable portfolio mix and determine if you have the right resources to tackle that plan; however, that plan is bound to shift as priorities change. So then what? It’s important is that you have the real-time insights to make strategy-led decisions to adjust and pivot accordingly.
The importance of this real-time wholistic data was highlighted as well as part of the report. There was a significant shift from spreadsheets/free tools to more strategic project portfolio management software. Over the last year, there was a shift from 30% of PMO leaders using using spreadsheets/free tools to now only 21%. You’ll notice that the use of project portfolio management and project management software has actually increased over the last year!
This shift is significant in highlighting the importance of the centralized data an organization gains from real-time insights available in a strategic tool. More PMO leaders are understanding the importance of those real-time insights to allow them to make insight-led informed decisions. Ensure your PMO is setup for success by defining metrics based on business goals and measuring to those metrics. For an on-time, on-budget PMO, ensure projects are measured to that goal. Similarly, if PMO goals are to drive business results, create project KPIs that support that result.
So what are some takeaways for ensuring your PMO is setup for success in 2022?
- PMO leaders are turning to software to gain insights required to become a results-driven PMO. The use of spreadsheets and free tools is decreasing amongst PMO leaders and that’s because they see the importance and ultimately the benefit of a strategic project portfolio management solutions to support a PMO that wants to be a value center in a business.
- The role of the PMO continues to shift from a cost center to a value center of excellence for organizations. This means that the alignment of the PMO and the business is crucial and when those are in sync, the results that are delivered are extremely impactful for the business.
- Real-time portfolio data is crucial to prioritizing the right projects and allocating the right resources. Over the last two years especially, organizations are realizing that project prioritization actually might mean saying “no” to projects that don’t align. By saying “No,” PMO leaders are able to ensure strategic alignment to the business throughout their entire portfolio and understand the capacity needed to deliver on that demand even as priorities shift.
In 2022, it’s is all about the rise of the results-driven PMO. As PMOs strive to meet the challenge of becoming a value driver in an organization, it becomes apparent that a new approach and outlook must be taken. What separates those that rise to this challenge versus those that struggle to execute is how they are able to shift from processes to outcomes. Results-driven PMOs differ from traditional PMOs in that they incorporate strategic planning and management. This doesn’t mean a PMO foregoes governance, but ultimately relies on it. However, results-driven PMOs focus on strategic project prioritization and planning and execution so governance becomes a function of the PMO rather than the purpose.
Interested in diving deeper into the data found in the latest PMO Outlook Report? Check out this complimentary copy.
Rachel Hentges bio
Rachel Hentges is the Director of Marketing at KeyedIn, where she has been instrumental in developing engaging industry related content for KeyedIn’s audiences for the last almost 8 years. From insightful webinars to industry research reports and everything in-between, Rachel is proud to distribute educational resources driving organizations to think differently about how they do business today!