5 Key Reasons Why You Need a PMO

Author: Ian Needs

Ever wondered what it takes to build a great project organization? Well a PMO is a great place to start, helping you to standardize processes and drive up project success rates.

In this article we pull on over 20 years’ experience of delivering project, program and portfolio management solutions to PMOs at various levels of PPM maturity to identify the key reasons why you need a PMO – or why you need to improve the maturity of your existing PMO.

Here are the top 5 reasons why you need a PMO.

1. Limited Visibility into Project Performance

Limited visibility into projects and resources is one of the leading causes of project failures. Centralizing all of your project and resource management in a central function, whether at the departmental or organizational level lets you easily address key questions, such as:

  • What work is being performed by who, and when?
  • How are specific projects aligned with corporate priorities?
  • How is the Return on Investment for specific projects calculated?

2. You have limited resources and capacity planning is an issue

Most organizations experience resource capability planning issues, which is greatly compounded when projects are managed in isolation. A PMO helps to significantly reduce these issues by centralizing the selection and prioritization of projects - using Project Portfolio Management techniques and tools to select the right projects at the right time based on resource and financial constraints.

3. There is no consistent methodology for project delivery

Inconsistencies in the way projects are managed make it extremely difficult to report on status and progress. With the advent of cloud-based project and portfolio management solutions, a standard toolset to manage projects, programs and portfolios is now within the reach of most organizations. Even with the most basic project management solution you can standardize the way your project managers plan projects, request resource and report on status and progress.

4. There is a lack of ownership and/or accountability

Ownership and accountability are key to project success, and an area where tools such as project portfolio management software really come into play. Project portfolio management tools provide the framework for you to ensure all projects have clear ownership and there is accountability to the business. From simply defining what resource and expenditure is required to deliver the project, through to outlining the key deliverables and benefits, PPM tools help you build a business case for each project to be used in selection and prioritization. A top down approach to PPM greatly simplifies this approach.

5. Projects often come in late or over budget and fail to meet the objectives

It would be a bit short sighted to simply say a PMO will eliminate late or over budget projects, but a PMO equipped with the right tools and the right processes will certainly limit project failures through extending the planning horizon, ensuring project selection and prioritization are in line with resource and financial constraints, and as we saw earlier, by providing greater visibility and control over the entire project lifecycle you will be able to react faster to issues as they happen make more informed decisions on corrective actions.

It goes without saying that great PMOs need great tools. You can find out more about the benefits and uses of PPM and the PMO in our recent whitepaper and webinar