Wednesday, October 8, 2008

What's It Worth?: Measuring the PMO

At the end of the day, the real measure of a PMO’s effectiveness is the degree to which it improves the speed, cost and consistency of project success. Without improving these components of a project, the PMO merely adds an additional level of cost and bureaucracy to the process.

While many see the PMO as a pure governance play, its true worth is in its ability to accelerate the success of projects. To do this the PMO needs the support of the organization’s leadership and project managers (PMs). This support is best sustained by the PMO providing the leverage PMs need to stay focused on moving projects forward while complying to mature and prudent project processes and protocols. For the PMO to substantially contribute to the acceleration and successful completion of projects it needs to excel at the following:

* Streamlining compliance processes and paperwork to the bare minimum needed to insure proper oversight of project assessment, approval, conduct and deployment

* Maintaining knowledge-based repositories consisting of all past projects (documentation, history, scorecards, etc.) so PMs can quickly research and learn from other PM’s experiences

* Providing expert guidance for PMs, leveraging their ability to lead effectively

* Maintaining estimating tools and standards allowing PMs to rapidly compile project estimates and workplans

* Maintaining a talent registry so that PMs can quickly find field teams comprising the right people for the effort

* Facilitating continuous improvements to project conduct and management processes

In addition, the PMO needs to establish benchmarks that will allow it to quantify improvements to project success rates in a pre- and post-PMO world. The rub comes when there are no performance metrics available prior to the PMO’s launch. When this is the case, the PMO needs to retroactively establish baseline experience ratings best it can. This can be done via surveys, reviews of implementation hits and misses, reviews of monies budgeted vs. spent, etc. Without these baselines the PMO will find it difficult, if not impossible, to demonstrate its value beyond improved governance policies and procedures. Each metric should be scored based on a weighted rating basis. For example, On-time Completion Performance might be weighted as having 20% of the overall performance score and have the following possible ratings:

5 = Outstanding – project completed on or before its original promise date
4 = Good – project completed within 2 weeks of its original promise date
3 = Fair – project completed 2 to 6 weeks late
2 = Poor – project completed 7 to 12 weeks late
1 = Unacceptable – Project completed over 3 months late

As projects were completed they would be scored and added to the pool of projects that were completed. The aggregate score might be factored by project size and the overall total posted to the performance scorecard and accordingly weighted.

Below are some of the metrics the PMO should consider for measuring its performance and value to the enterprise:

Project Assessment Performance:

Measures the response time, speed and completeness of the project assessment process from request through assessment publishing

Project Proposal Performance:

Measures the speed, completeness and acceptance components of the project proposal process

Communications Plan Performance:

Measures quality of compliance to the published communications plan

On-time Completion Performance:

Measures the ability of Project Management Teams to accurately estimate and deliver projects when promised.

On-budget Performance:

Measures the ability of Project Managers to estimate and achieve project budgets

Process Compliance Performance:

Measures how well Project Teams followed the rules and protocols for project conduct

Project ROI Performance:

Measures the payback of the project and returns generated in terms of actual and against estimated

Stakeholder Satisfaction Performance:

Measures what stakeholders think of the project process and results achieved

PMO Project Support Performance:

Measures what Project Managers think of the tools, expertise and ongoing support of the PMO related to accelerating their ability to plan, conduct and complete projects

PMO Oversight Efficiency Performance:

Measures PMO oversight costs to results achieved allowing management to rate PMO effectiveness per project dollar spent

PMO Staff Efficiency Performance:

Measures turnover and growth of PMO staff against project money spent

These 11 performance metrics provide a 360-degree view of how the value the PMO provides to the enterprise and its ability to foster and sustain project success. By weighting and rating each metric as previously described and continuously raising the performance trend bar, the PMO can mature add stellar value to the organization it serves.


I really appreciate for covering the entire processing structure of the PMO.

Your english is also highly professional.

Keep it up and keep posting more such valuable information.