That's a hell of a question to ask when you're the consultant asking a client why they want to start a Project Management Office (PMO). But, it's one I felt necessary because thus far their reasoning wasn't sound. Responses had been between "I read somewhere that..." and "Someone told me we should..." Those aren't good reasons to start a PMO.
I had a list of questions jotted down to ask the leadership team. As they answered, things became more clear. Yes, they'd read about a company in the same industry that stood up a PMO and was successful. Yes, they talked to a peer who recommended one be created. Eventually, we boiled it down to one word: Complaint. As a newly minted Medicare provider, they needed processes in place to stay compliant with Medicare regulations. Standardizing the project management approach would help in that arena. So, our "Compliance Ready!" PMO was born.
Let's look at the facts:
- 50-75% of PMO's fail within the first 3 years (it's so bad even the statisticians can't agree!)
- 33% of PMO's never meet their potential of delivering value to the company
- Most large companies that have had PMO's fail, stand up new ones with similar results
Dismal. Sounds like sunk costs to me.
Do I feel that PMO's can add value? Yes. Does every company that's maturing their project management practices need a PMO? No. In the scenario above, we were successful. In another, I was employee #2 in a newly created M&A PMO. It was stood up because finance, who owned M&A integration prior, wanted help. We lasted two months before finance took it over again. Turns out they needed some training and tuning of their processes. PMO=fail.
In my career I have led, started up, revamped, and been a team member in a number of PMO's. Each had its own unique capabilities and services. Each also taught me valuable lessons, including how to ask the right questions early on in a PMO's life. Answers to these questions can be used to create a business case/charter for the department. Below are questions I've noted over the years. Some are more high-level organizational questions. Others boil down into what a PMO means to the team asking for it. These can, and should, be asked cross-functionally (the more input the better). I'm hopeful these will help you in your next PMO endeavor.
- Where does the power live in the company (owner, exec level, middle layer, other)?
- What is the existing organizational make-up/hierarchy?
- Is there an organizational strategy and if so, are employees aware of what is important to the company?
- What KPI’s do you measure? Which KPI’s keep you up at night?
- How would you define the culture of the company and your individual department?
- How well do you feel the company is adapting to change?
- How are decisions made about what projects to pursue? Any policies or controls in play today?
- If yes, what?
- If no, why?
- What is your vision of a PMO?
- What "services" would a PMO provide to the company?
- Has a PMO, including human capital, training, and tools, been budgeted?
- Have you tried a PMO or similar structure before and if so, what happened?
- What is your definition of a successful PMO? Are there recognized incentives for having one?
- Do stakeholders understand the role a PMO plays in the company? Do they understand their role?
- What templates and tools are used and how are they utilized?
- How is project management viewed in the company?
- What is working today and what’s not as it relates to project management? What other functions aren't working as expected?
- What is the maturity of the project managers?
- How are you kept informed of project progress/status? Do you know how many projects are in progress?
- What are the top 2-3 reasons you think projects fail at this company?
- Do you REALLY think a PMO will solve the issues discussed, or is there some greater driving force?
This last question should be one of the last you ask your sponsor/management team, and it's a biggy! This question came from another consultant who asked it of a potential client during a pre-sales meeting. After the 30 minutes of Q&A, the client said no, culturally a PMO wasn't a good fit right now. Smart move.
Whether you're asked to start a new PMO, revamp one that's in trouble, or take over an existing that's humming along, don't hesitate to ask some tough questions. I'm hopeful these questions will get you pointed in the right direction, especially if you're creating or revamping a PMO and need a business case/charter to support.