Do you need a PMO (Project Management Office)?

I am often asked by CEOs and senior managers, “Does our organization need a PMO?” Like all yes/no questions about complex topics that involve a cost– benefit trade, the answer to this question is, “It depends.”  Let me elaborate…..

What is a PMO?
Software development projects, especially complex ones, have a notoriously high failure rate—some estimates are as high as 60%–70% of software projects fail to deliver on their requirements and cost estimates.

A PMO, often reporting directly to the CIO, provides guidance and support to projects in implementing best practices, complying with standards and using tools to help keep projects on track. PMOs may conduct project reviews and increasingly are being expected to be directly accountable for project results. In some organizations, the PMO is staffed with experienced personnel who are loaned out to manage IT projects.

T.D. Jainendrukumar writing in PM World Today (January 2008) provides an overview of the duties of a PMO. He sees the PMO as responsible for: Practice Management, Infrastructure management, Resource Integration Management, Technical Support Management, and Business Alignment and his article describes these functions in detail.

What are the benefits of a PMO?
In an article by Megan Santosus for CIO, titled Why You Need a Project Management Office (PMO), she reported that her research found that more than 50% of those organizations with a PMO claimed improved project success rates.

At Cognitive Technologies, we encourage establishing an organizational PMO when projects are of strategic importance to the company’s future or projects are to be executed over multiple years, multiple business units or in coordination with outside organizations. We have found that a PMO helps organizations execute complex software development projects by providing increased:

  • Control
  • Collaboration
  • Communication

If you want to dig deeper, check out Cognitive Technologies white paper about our experience and recommendations regarding PMOs: “Why do you need a PMO”

Does your organization need a PMO?
Here are 5 yes/no questions that will help your organization decide if a PMO will help you do a better job managing your software development projects:

  • Is the level of complexity within the organization’s environment high—i.e., the effort may involve multiple departments (each of which has different stakeholders) within the client organization?
  • Is the project for an outside client who is likely to assign an Independent Validation (IV&V) consultant or auditor to the program?
  • Are specialized requirements involved? (For example, HIPPA information security requirements, financial security requirements, EV reporting, CMMI compliant process or execution levels, PMI best practices, or specialized time reporting and charge codes.)
  • Will a single methodology be enforced across the different projects or program team, requiring cultural and behavior changes for the individual contributors?
  • Will there be a large number of staff/people to be managed, assigned, and tracked (i.e., 100-150) across the projects or program?

One other good source for PMO thoughts is the 2003 article in CIO magazine on Why do you need a Project Management Office.

If you have worked with a PMO in your organization, please leave a comment and share your observations. In a near-future post, I will talk about the Do’s and Dont’s of setting up a PMO.


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