5 Major Benefits of Adopting an Effective Project Portfolio Management and PMO Initiative
In this post we explore the five major types of benefits to be gained by adopting an effective Project Portfolio Management/PMO strategy. These include:
- Fostering an environment where collabourative decision making is easier and more fruitful.
- Minimizing the risks to individual projects in terms of business impact.
- Making sure that your human resources are maximised for control and efficiency.
- Proving the value of the PMO to important stakeholders – in terms that are important to them.
- Making sure that success not only happens today, but is more likely with future project initiatives.
Now let’s explore each of these benefits in greater detail.
#1 Better Decision Making
Our first bucket of PMO benefits concerns its ability to drive better business decisions. To make good decisions you need good data and that’s why visibility is so crucial, both from a strategic, top-down perspective and from a tactical bottoms-up perspective. When you have a good handle on past project metrics, it makes it much easier to predict future factors like resource utilisation. And when you have a good handle on what is happening in your current project portfolio, you can find out which projects are not contributing to corporate objectives. As part of the project portfolio management team, it’s better for you to discover this than hear about if from the line of business managers or even worse, from the executive suite. In the area of resource utilisation, a good PMO strategy will help you understand how what you change on one project impacts the delivery of other projects. It will also help you re-prioritise and re-allocate as necessary. And finally, a good PMO strategy, backed up by solid technology, will allow you to model multiple scenarios to make sure the projects you add will contribute to corporate objectives and not bog down other projects.
#2 Minimize Risk
PMO Benefits Bucket two is the ability to avoid or reduce your exposure to risks. If you attended the first webinar in our PMO series, titled the Disturbing Reality of Todays PMO, you have heard about the many ways that the PMO can be considered a detriment to the organisation and this is not a pleasant place to be. There are several categories of risks, including financial, governance, resource utilisation, and misdirected efforts. On the financial side, good PMO policies will help you to calculate the benefits vs. cost of cancelling a poor performing project, as well as identify projects that are not contributing to corporate objectives. The sooner you identify these wayward projects, the sooner you reduce your risks. As for reducing governance risk, the goal is to build an accountability framework that ensures that the right level of compliance is followed through every project lifecycle.
#3 Maximise Resources
The third great benefit of a PMO is the ability to maximise your resources. The greater degree of visibility we mentioned earlier, both on the macro and micro level, makes it possible for you to gain the type of control over your projects that is not possible in a non-PMO environment. A centralised approach also allows you to reduce your project costs, primarily though the reduction or elimination of duplicate effort. Since human resources are by far the greatest cost of implementing projects, this can be a substantial benefit. Nothing increases the frustration and cost of a project more than skills shortages, especially during peak demand periods. With a good capacity planning tool you can see your overall and specific project demand and redeploy your resources accordingly. With a resources database you will be able to quickly find the right resource for each project, keep skills profiles up to date, and then manage resource demand, allocations and capability.
#4 Prove the Value to Stakeholders
If there is one factor that separates the super successful PMO from the rest, it is the ability to prove its value to the stakeholders. By stakeholders, I mean anyone who has a vested interest in the PMO or individual projects. This group includes line-of-business managers, project managers, financial analysts and the executive team. Remember that is not only the actual value of what you are doing and what you accomplish, but the perception of value, that counts. And when you are able to achieve the reality and perception of a well-oiled and functional PMO, lots of benefits accrue. You can greatly expand both external and internal morale and reduce the time it takes to produce executive and board-level reports. An effective PMO and PPM strategy also allows relevant stakeholders to have access to the project status and results data they need, without bogging them down with sorting through reams of data that is irrelevant and confusing. The net result of this greater degree of transparency is that stakeholders gain a much greater comfort level and appreciation for what you are doing both in terms of project execution and results.
#5 Enable Repeatable Success
We mentioned how important it is to prove the value of the PMO to all stakeholders. One of the best ways to do this is to demonstrate how the PMO creates an environment that leads to repeatable and predictable project success. While not discounting the skills of the PMO leadership, the essence of an effective PMO is providing a process framework and technology infrastructure that allows you to continuously meet your business objectives. Repeatable success is gained by establishing best practices and proven project management methodologies and enforcing their use throughout the organisation. You need to be able to leverage the processes and lessons learned from previous projects and capturing this information in the project repository. This allows you to not only use past data, but also real-time data to continually improve your project operations and results. In this way, you will be seen as a proactive, not reactive organisation. Finally, you need to ensure that you have a single version of the truth to enforce consistency in evaluating past projects and guiding the prioritisation and execution of future projects.
- Businesses Turn to Agile Principles for Improved Resource... Henry Bennett
- Challenges and Solutions from an Expert PMO Leader Welcome... Henry Bennett
- Businesses Embrace Agile to Thrive in any Environment Even... Henry Bennett
- 5 Answers to Your Most Important Change Management Questions Henry Bennett
- How can Top-Down Portfolio Management Solutions help... Henry Bennett
- PMO and Organizational Transformation: Crossing the... Henry Bennett
- How project portfolio planning software helps you pivot,... Henry Bennett
- Simplify Agile Adoption and Portfolio-Level... Henry Bennett
- And Then There Was One While the pandemic of 2020 slowed... Shawn Dickerson