The project management office (PMO) sets world-class operations apart from the rest, according to a recent Hackett Group research note on PMO maturity. The PMO, typically established as a resource coordinating function, can be elevated to deliver strategic value with the right leadership.

According to Hackett, many companies place (strategic) portfolio management and performance management processes in the PMO alongside (tactical) program execution and delivery. When following “the path to a cross-functional G&A Service Delivery Model and to convergence between IT and the business, PMOs [become] a crucial vehicle for bringing various stakeholders together,” according to the researchers.

Jack Duggal, a leading PMO expert and frequent lecturer at the Project Management Institute (PMI), goes even further, believing that the PMO is not only strategic but also indispensable, especially in turbulent times. Here he gives five reasons why.

In recent decades, the PMO has emerged primarily as a vehicle for managing IT projects. Gartner reinforced this view last year in a research note identifying the central role that the PMO can play in streamlining the IT modernization effort. Despite their prevalence in IT, however, PMO processes, procedures, tools, and methodologies can apply to managing any project.

In its note, Gartner predicts that “IT organizations will be unable to meet rapidly changing business demands simply by working harder than they have in the past.” What they need is not the PMO per se but IT modernization, which is intended to refresh not only generations of aging technology and the accompanying skills but also the business’s expectations for its investment in IT.

The PMO comes into it as the vehicle for managing the various initiatives associated with IT modernization. According to Gartner, the PMO gets combined with an investment in project and portfolio management (PPM) processes and technology to deliver sufficient organization, process definition, and process automation to identify and address the expected increase in and proliferation of the various IT stuff needing retirement or replacement. Gartner expects this to occur over the next 5 to 7 years.

Duggal folds his five reasons for the PMO into a catchy acronym, SOARS.

1. Savings — Reduce costs and avoid cost through less rework and greater reuse. It is not enough to say that a project was completed under budget; you need to show how much was saved.

2. Optimization — To do more with less, project managers have to apply optimization techniques to maximize the utilization of resources, effectively getting more done with the same or, preferably, fewer resources.

3. Accountability and governance — Greater accountability and governance through project lifecycle management with appropriate stage gates and standard processes.

4. Risk management — The risk management knowledge area of project management creates a culture of proactive risk management by the identification and management of threats as well as opportunities.

5. Selection and prioritization — This enables the organization to focus on the right things and prioritize limited resources.

There is a sixth reason for the PMO, according to Duggal — execution excellence. Organizations with a well-developed and effective PMO simply execute — whatever the initiatives — better than others, giving them a competitive advantage. ###