PMOs and Business Strategy

cogsFor most organizations, the Project Management Office (PMO) is simply a centralized organizational structure for standardizing practices used in the delivery of their projects.  An effective PMO allows these organizations to more consistently deliver successful projects.

For some high-performing organization, the PMO is able to achieve much more.  It is able to help the organization drive and achieve its business strategy.  So how can something as boring and ordinary as good project management become a key to organizational success?

First, let’s think about the planning process.  Successful organizations define their goals and their plans for meeting those goals using some type of strategic planning process.  As a goal (e.g. achieve 5% organic growth) is refined into a strategy (e.g. by attracting more customers through a better customer experience), strategic and tactical projects emerge (e.g. redesign customer portal to improve ease-of-doing-business).

A mature, fully-engaged PMO becomes the keeper of the project portfolio.  If the PMO understands the strategy that the organization is striving to achieve, the PMO can use this understanding as it manages the project portfolio to drive that strategy.  First, and most critically, the PMO ensures that key, business-critical projects are delivered successfully.  It also ensures that project success is aligned with and measured against the strategic goals that the project is defined to address.  The PMO works with the project teams to define KPIs that clearly tie to the organization’s strategy.  If a project can’t be tied to the strategy, the organization can then determine if the project fits into the portfolio.  Similarly, the PMO can be used to resolve priority conflicts between projects, helping to clarify situations where the strategy may be at odds with itself.

More pro-actively, the PMO can forecast capacity, helping the organization understand how much change it can realistically undertake within a given budget or timeframe.  The PMO can also see and exploit synergies between projects, helping the organization take advantage of unexpected opportunities.  For example, given its view of the project portfolio the PMO may see how a service being built to support one project can be utilized to simplify or enhance another project.  Finally, the PMO provides a feedback loop, informing the organization of its progress against its strategic goals and allowing it to take early, corrective action when progress lags or goals shift.

Thus, a PMO becomes a crucial management tool for implementing the organization’s strategy.  Organizations that are able to effectively use this tool are better able to achieve their organizational goals and thus continue to thrive.  In today’s competitive and challenging environment, can any organization afford not to take full advantage of a PMO?

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