As an organization grows and the number of new projects increases in cost and complexity, the resources and infrastructure required to successfully complete projects on schedule and on budget often exceed what individual project teams can provide. These teams are often focused on their specific tasks and cannot effectively communicate with other project teams due to time and resource constraints. Starting a PMO can be an effective way to alleviate this strain. At its core, the PMO provides oversight and governance to project managers (PMs) and acts as a funnel of information for the status of projects from the PMs to management and executive teams, and in return, sends valuable information and directives from senior leadership back to the PMs. This function is central to why PMOs have become the industry standard. Per the State of Project Management 2020 survey from PM Solutions, which surveyed 212 PMO employees from a wide spectrum of industries, 79% of all companies, and 93% of large companies, now have PMOs (PM Solutions, 2020).
This article covers the Top 5 reasons any company should consider a PMO.
Top 5 Benefits of a PMO
- Strategic Alignment (Needs, 2019):
The PMO can prioritize a large list of projects based on the larger strategic goals of an organization. This helps direct the focus of time and resources to the right projects, which can help the organization achieve its larger goals in a shorter amount of time. It can also help properly redirect resources when a project is completed. Per the 2016 PM Solutions State of the PMO, a 43% increase in strategic alignment was driven by PMOs.
- Establishes organization-wide project management standards (Martens, 2021):
PMOs set standards for projects across the organization, and then manage the portfolio in alignment with these standards. This creates consistency in procedures and reporting between teams, which can make all projects run more efficiently.
- Reduces the time and cost spent on projects (Martens, 2021):
A PriceWaterhouse Coopers study in 2014 found that the return on investment for projects with good project and change management processes was 108% greater than those which had poor project and change management. (O’brien, Haskins, 2014). A strong PMO can implement these project and change management processes across your organization, realizing this ROI increase.
- Improves resource utilization (Martens, 2021):
The fact is many companies struggle in this area. PMO’s can take a big-picture view of all ongoing projects, predict and plan for potential resource constraints. This enables bandwidth clarity across cross-functional teams, reduces the frequency of bottlenecks, and allows for prioritization of resources to the most important tasks or projects.
- Develops, shares, and monitors project management best practices across your organization (Martens, 2021):
The development of best practices can include SOP’s, as well as templates for Schedule, Cost, and Reporting that can be incorporated into all projects across the organization. This can result in significant improvements in efficiency and consistency.
As projects continue to grow in both cost and complexity, the need for proper project management practices and procedures driven by a PMO has never been more apparent. Increasingly, the world’s leading companies are developing their own PMOs or are turning to outside organizations for their PMO needs. In today’s world, can your organization afford not to start a PMO?
Why Baseline Controls?
Baseline Controls employs a team of dedicated and highly trained consultants and analysts specializing in Project scheduling, Project management and Cost Management. For more information on what Baseline Controls
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- Needs, I. (2021, February 8). The 5 most important business benefits of a successful PMO. KeyedIn Solutions. Retrieved March 15, 2022, from (Source Link)
- Martens, J. (2021, June 2). How a project management office (PMO) promotes collaboration and reduces silos Asana. Retrieved February 8, 2022, from (Source Link)
- O’Brien, D., & Haskins, L. (n.d.). Project Management: Improving performance, reducing risk. ￼. Retrieved February 7, 2022, from (Source Link)
- PM Solutions. (2020). The State of Project Management 2020 TRENDS AND PRACTICES FOR A NEW DECADE. Retrieved February 1, 2022, from (Source Link)
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