Having worked for both internal Project Management Offices (PMOs) and external, customer facing PMOs, I have noticed some significant differences in the approaches and the value each of these PMOs brings to the table.  The argument is an extension of the IT department discussion, and whether it serves the organization internally or can it also be leveraged to serve external customers?

External customers must be the focus of the effort.  These are the customers that give the organization money to purchase the product or service the organization produces.  If the organization is not operating efficiently, PMOs can help by executing projects that improve the organization’s ability to execute, but in the end, it is the external customers acceptance of the organization’s output that determines the organization’s success.  And the benefits organizations derive from PMOs can also be extended to external customers.

When an organization delivers products or services to its customers, that activity can benefit from the discipline of a PMO.  The application of project management principles to customer facing activities inevitably increases the probability of success.  And successful delivery to customers is the name of the game.

So why is this not a universal thing?  Why are customer facing PMOs not more common?

For one, there is an expense associated with a professional project management function.  And that expense must be paid for by the customer.  This increases the cost of the product or service, challenging the competitiveness of the organization.  But the reality is that there is a higher probability of successful delivery with the application of professional project management to customer delivery activities.

How much does a failed customer delivery cost?

Large and sophisticated customers have PMOs of their own, and they can understand and appreciate the value of a professional project manager.  However, this message needs to be built into the value proposition and the sales process.  It cannot be a surprise or an “add on” cost after the sale.

On the delivery side, the PMO must build value by developing and adhering to a lean, efficient delivery methodology, one that can be easily communicated to the customer.  The sales force needs to build the delivery methodology into the sales narrative.  Customer facing PMOs cannot afford to spend cycles on processes or activities that do not add value to the customer delivery.

PMOs have a place in customer delivery and can be a differentiating factor that provides a competitive advantage, particularly in technology services and products.  However, they need to be lean, efficient and laser focused on achieving customer objectives with the minimum amount of effort while increasing the chances of a successful delivery.

In a previous post I discussed the need to “get back to basics” when it comes to Project Management, and one of those basics is having a Project Management Office (PMO). I’d like to discuss what I believe to be some of the critical success factors for a new PMO.

PMOs come is all shapes and sizes depending on their mission and the size and complexity of the organization they serve. However, there are some critical success factors they all share.

The mission of the PMO needs to be understood. Why does the PMO exist? What purpose does it serve? A PMO charter is a very useful tool to socialize and gain support for the PMO’s mission. A PMO without a clear mission will muddle its way through challenges, just like any other team without a clear mission. And obviously it can’t achieve a mission it doesn’t have. Don’t assume this is understood by everyone. Write it down, share it, and refer to it constantly.

The PMO needs tools to succeed. In this age of technology, there are many tools to communicate and to report. The PMO concept predates many of these tools, but they have become a critical success factor of modern PMOs. The PMO needs to communicate both project status and a methodology for all to follow. In the good old days, a binder would be the tool of choice, with paper templates, process flow diagrams, and sample deliverables. Technology allows us to digitize and share these much more effectively these days, but the concept of a “binder”, or of a “PMO library”, remains relevant today. Without it, the PMO cannot ensure consistency or onboard new Project Managers effectively. In addition to the PMO library, a “project record” is needed. Somewhere to keep track of project status and collect project artefacts.

The PMO needs staff. If all the PMO team members are managing projects 100% of the time, then the work of the PMO itself is undone. It can be part time of one person or it can be a staff of dozens. It depends on the size and complexity of the PMO, and it depends on its mission. But someone has to maintain the PMO library, someone has to define project record standards, and someone has to onboard new PMs. These are three of the most critical functions of a PMO. There are many others, but at its simplest, these alone could justify the investment.

So, in summary, the PMO needs a mission, a library, and staff. That’s just the tip of the iceberg. As the PMO adds value to the organization, additional needs will arise. But the value of a PMO cannot even begin to be realized without an initial investment, and these three things are as good a place to start as any. PMOs often grow with their organization and can become very complex and large. But they shouldn’t forget their beginnings and keep focus on these basics. A strong foundation will ensure the PMO can grow to serve its organization and provide value.

Project Management has made a lot of progress since the days the Department of Defense (of War?) built the weapons systems of WW2, or NASA sent a man to the moon. The need to apply knowledge, tools and techniques to project activities to reach the desired outcomes remains and our ability has improved. 

However, as we move into the 21st century, and a whole new generation enters the workforce, how do we pass on those lessons? As a microcosm of this problem, how do we enable a new Project Manager to become effective? With a focus on technology, agile development, and all manner of tool and technique, I think we may be missing a focus on the fundamentals.

I am a good project manager. But I have worked with better. Much better. And what makes a good project manager great? I think great project managers have made the fundamentals look so easy and second nature that we forget many of these are learned skills, and we have failed to pass them on to the new generation. A multi-million dollar project portfolio tool is not going to fix this. Actually, it is going to make it worse.

So what is the agenda for the meeting? Did we have action items coming out of the meeting? What are the major milestones? Dependencies? Budget? These things are the bread and butter of a project manager, but these are learned skills. We cannot assume a Project Manager has them. We have to teach and agree on standards of behavior.

I think that a severe lack of business leadership combined with a lack of understanding of this problem has led to a belief that Project Management is not a “real” job, but a “role” that can be tacked on to someone’s job description. And this attitude is dangerous as it ignores decades of proven work performed by Project Managers is a multitude of industries. At the other side of the spectrum, some Project Managers become so consumed with the minutiae of reports and plans they lose the forest from the trees.

So, let’s get back to some basics.

1. Project Management is a real job. Yes there are people called “Project Managers”, and their job is to manage projects. It seems silly to have to lay this down as a basic, but this is, after all, getting back to basics. You cannot add the “role” of Project Manager to someone else, either a Sales person or an Operations Manager, and expect them to do it. You need a dedicated, professional, trained Project Manager.

This could potentially involve changes to HR systems to create new job descriptions, a job career path (Project Coordinator to Project Manager to Senior Project Manager), changes to compensation, management training, etc. But the result is the identification and assignment of qualified individuals to fulfill this job. 

2. You need a methodology. There are plenty of methodologies and accepted methods of doing things, so no need to reinvent the wheel. But you do need to invent it once. What is your project lifecycle? What does a status report look like? How do you track your budget? You need to define and agree on the fundamentals. You need common tools, even if it just Microsoft Excel. So that every project is reported and tracked the same way. Trust me, this will work wonders when you move on from the basics to do portfolio management, or when you have to onboard a new Project Manager. 

3. You need a Project Management Office. Once you have 3 or 4 Project Managers, you will have enough critical mass for a PMO. It can be informal at first, and grow and evolve as your portfolio grows. But someone has to mind the candy store. Someone has to ensure consistency, support and coach the Project Managers, bring all their work together into some manner of Program management. Someone has to onboard new PMs and ensure the knowledge is shared and passed on. This concept has been tried successfully for decades. Trying to reinvent this concept at this stage of the game is pointless. Project Managers without a PMO are just that – a group of Project Managers. Their work disjointed, inconsistent, and lacking a single minded purpose and direction.

So, you need Project Managers, you need a methodology for them to follow, and you need some mechanism to ensure consistency, to support them and to onboard new Project Managers to your organization.

You should focus on your Project Managers and make sure they have the tools to succeed. Don’t assume they know every meeting needs an agenda, or that they know how to report status. You need to provide them guidance and support so that they can manage the fundamentals in a consistent and effective manner. Only then you can work your way up to loftier goals of portfolio management and program management. Without a strong foundation, anything you build will surely crumble. Don’t forget the basics.

Technology is a small piece of the project portfolio management (PPM) system puzzle. As with the deployment of any new system or technology, organizational change management is a critical success factor. I’m not going to go in depth into organizational change management, as there are others much more skilled and experienced on this topic. I would like to, however, provide the perspective from a user and project manager of PPM systems.

Is your organization ready for the change? Who are the key stakeholders? How are you communicating with them? Do they welcome the change? Will they resist it? Will they adopt it? These are questions that any organizational change manager will ask.

In the context of a project portfolio management system, you have various key stakeholders you need to make sure are on board.

Project sponsors are the primary consumers of the data from this system. Is the data accurate and timely? Is it presented in a concise, useful and succinct format? Is it being used as an input into strategic decision making? A negative answer to any of these questions jeopardizes adoption.

Project managers are on the front line. They are making projects happen. No portfolio has any hope of being managed if it is not delivering value to the business. Project managers are the leaders of the different components of the portfolio. They will provide key inputs into the PPM system.

Project teams – If project managers are on the front line, project teams ARE the front line. By providing a compelling and useful online collaboration system, you ease the input of real time project status data. You can shift from email to online repositories where not only can teams collaborate, but project outputs gain visibility and transparency, allowing opportunities for data aggregation and analysis.

So from project teams to project managers to project sponsors. Is the data flowing in both directions? Not only are sponsors getting the data they need, but project teams should be getting feedback and direction. Are teams following a standard delivery methodology? Are project outputs producing consistent results that can be aggregated?

If every project reinvents the wheel in terms of outputs and reporting, producing a portfolio report would be as difficult as assembling a puzzle blindfolded. And there are few things as demoralizing to a project team than producing outputs that no one uses or appreciates. Project sponsors play a key role in not only consuming the data, but in giving project teams feedback and encouragement.

The usual suspects of durable training, quick reference guides, an effective support model, all need to make their mandatory appearances to contribute to the success of the deployment. The principles of organizational change management are very applicable and effective, and critical to this effort.

The choice of technology needs to match the level of organizational maturity, technology skill, and come with strong vendor and user community support. Add to this a clear understanding of your key stakeholder groups, and a strong message from your organization’s leadership about the importance of project reporting, and you will have the key ingredients for the successful deployment of a PPM solution.

Choosing the right tool for project portfolio management among all the available options today can be a daunting task. Technology has obviously changed the way we do business, and how we use it to manage projects is one of the key challenges facing project management professionals these days. There’s a multitude of tools and options, and choosing the right one for your organization can be difficult. Choices range from the ubiquitous Microsoft Excel to the more sophisticated enterprise tools like Microsoft Project Server or Clarity.

Using tried and true principles of requirements gathering, software acquisition, and software deployment will only get you so far. The key ingredient for making the “right” choice is your organizational discipline. Dashboards and portfolio valuation tools are great, but you need the discipline to consistently capture accurate and relevant data, and you need senior leadership consuming and demanding this data. You need teams with the discipline to record and track their time spent on project tasks, and the Project Managers with the disciple to update and maintain accurate project estimates, forecasts and actuals.

I just used the word “discipline” four times in that paragraph. Yes, it’s that important.

You need organizational discipline, and you need leadership support. Without them, the implementation of any portfolio management tool is doomed to fail.

If leadership consumes the data and routinely uses it to make strategic portfolio decisions, then project teams will be more motivated to produce the data. Without that motivation and a culture of discipline around project status data collection, these fancy portfolio management tools quickly become the graveyard where status reports go to die.

If you consider the entire continuum of tools available for project portfolio management, from good old pen and paper (or the digital equivalent of Microsoft Office tools) on one end, to the most sophisticated web-based, enterprise tools like Clarity or Microsoft Project Server on the other, the “right” choice for any given organization may be anywhere along that line. Many good Project Managers use Microsoft Excel to great effect, while other more mature and complex organizations have been able to successfully leverage enterprise tools to manage their portfolios.

The “right” tool is entirely dependent on the level of organizational maturity, project management discipline, and leadership consumption and demand for the output from these tools. Using sophisticated tools takes a great deal of money and effort, and will only succeed if the value derived from that investment outweighs the effort and cost required to implement it.

If you are unsure about the level of discipline and support for portfolio management technology in your organization, a phased approach might be the answer. Leveraging tools like Microsoft SharePoint allows the use of “starter” tools with a relatively low cost of development and implementation. Can you muster the support to maintain a master project list? Can you maintain a basic set of key performance indicators consistently updated? If you can’t even do that, then investing time and money on an enterprise tool would be a waste. On the other hand, if you are able to move your organization away from Excel and into an online, collaborative model, then you could take the first step into a more sophisticated and mature way of managing your project portfolio.