Why PMOs Fail: 5 Shocking PMO Statistics
In a recent webinar on the Disturbing Reality of Today’s PMOs we explored some of the most shocking statistics and reasons why Program Management Offices fail.
As you can see from the quotes below, there is much to be concerned about as you set up your PMO and Project Portfolio Management (PPM) strategy.
- 50% of project management offices close within 3 years (Association for Project Mgmt)
- Since 2008, the correlated PMO implementation failure rate is over 50% (Gartner Project Manager 2014)
- Only a third of all projects were successfully completed on time and on budget over the past year (Standish Group’s CHAOS report)
- 68% of stakeholders perceive their PMOs to be bureaucratic (2013 Gartner PPM Summit)
- Only 40% of projects met schedule, budget and quality goals (IBM Change Management Survey of 1500 execs)
One of the overriding issues fueling these poor stats is the fact that in many organizations, there is a wide gap between what the PMO is doing and what the business expects.
This misalignment has serious consequences for both the PMO and the business. As pointed out by the first two bullets, the failure rate is very high with about half of all PMOs closed within 3 years or considered implementation failure.
And as Gartner points out, backed up by many other industry statistics, there is not a lot of good news when it comes to how the PMO and Project teams are considered by the rest of the organization. An amazing 68% of stakeholders perceive their PMOs to be bureaucratic and only 40% of projects met their goals when it comes to schedule, budget and quality.
For many, this misalignment is caused through a lack of adequate tools, as well as the 4 fundamental pillars that drive program success – resources, money, deliverables and benefits.
PPM and the PMO go hand in glove with PPM offering a number of primary functions to the organization, including:
- Portfolio Tracking (Performance Monitoring)
- Portfolio Governance and Oversight
- Portfolio Planning including Resource Allocation
- Portfolio Selection and Prioritization
- Portfolio Process Management
All of these functions are crucial to the PMO demonstrating its value to the business, and as our statistics show there can be significant consequences of not Implementing PPM.
It’s not all bad news however, a significant minority of PMO’s are maturing in a way that adds great value to their businesses. In our article 7 Characteristics of a Best in Class PMO we talk about what these best in class PMOs do from a strategic and tactical viewpoint to separate themselves from the rest. With the right knowledge and an effective game plan, and the right toolset your PPM and PMO strategy can make a huge difference.