The Project Management Office Function: Critical to Programme Success

At a time of rapid regulatory change and increasing cost controls within the financial services sector, the need for keeping projects on track and well aligned to overall corporate strategy couldn’t be greater.

Establishing an effective Project Management Office (PMO) function can help organisations keep programmes co-ordinated, increase accountability and competitiveness, and maximise return on investment in an increasingly volatile market environment. New Link Consulting’s portfolio of project management resources includes dedicated and experienced PMO practitioners offering bespoke and objective guidance and advice to ensure clients’ projects deliver on time and remain in focus.

Within the financial services industry, the PMO fulfils a vital stewardship role, defining and maintaining organisational standards for project management, and overseeing project implementation from inception to completion to ensure projects adhere to overall corporate strategy and deliver a return on investment, on time and within budget. A PMO can also act as an escalation point during delivery for any operational issue that prevents project progress.

The key to establishing a successful PMO function is to appoint a strong PMO Lead, who can objectively analyse the organisational and project requirements, create a bespoke solution, and appoint a dedicated team of PMO Analysts with the necessary experience and skillset to oversee the project throughout its duration.

Project Management Office:

PMOs may adhere strictly to one of the defined types or may combine aspects of two or more within their scope of work.

Working with the project’s senior stakeholders, the PMO Lead takes responsibility for the initial definition of the PMO and for making readjustments as necessary throughout the project execution phase to keep it relevant and to maximise the value added offered by this function.

The International Journal of Information Management (2006) identified the emergence of these three distinctive types of PMO:

Operational PMO

Operational PMO is typically ‘hands-on’, reactive and focussed on job completion, with responsibility for tracking project scope, costs and resources. Tends to work to shorter term guidelines.

• Key deliverables include:
• Scope management
• Cost management
• Resource management
• Quality management

Tactical PMO

The Tactical PMO operates to a more proactive agenda than the Operational PMO, managing the programme’s direction (though not necessarily setting it) and working along medium to longer term guidelines. Tactical PMO builds key performance metrics, well defined governance frameworks and facilitates quick issue/risk resolution. Tactical PMO escalates any concern about project adherence or direction, using data collected from performance metrics as evidence

• Key deliverables include:
  As Operational PMO, PLUS:
• Programme-wide performance metrics
• Governance frameworks
• Third party supplier management
• Risks and issues resolution
• Benefit tracking
• Programme Direction Monitoring

Strategic PMO

With support from senior management, the Strategic PMO drives the direction of the project and makes key investment decisions. Strategic PMO is highly proactive, taking a longer term view to ensure project aligns with corporate strategy and delivers on time and within budgetary tolerances. Likely to manage other PMO teams and ensure co-ordination between them.

• Key deliverables include:
  As Tactical PMO, PLUS:
• Investment decision making
• Corporate strategy alignment assessments
• Transformation delivery
• Capacity and benefits management
• Template creation
• Mentoring and coaching project management staff
• Setting strategy and direction

A 2010 survey by KPMG revealed that 70% of financial services organisations experienced at least one major project failure in a 12 month period, while 50% of all projects failed to consistently achieve their aims.

Seven situations where effective PMO can improve project outcomes

1. Identifying Scope Change/Creep:
As custodian of the project’s intellectual property, the PMO is best placed to identify if the project is drifting from its intended scope, providing time to get it back on track.

2. Managing Reporting:
Giving the PMO responsibility for the project reporting function, frees up the hard pressed Project Manager to focus on programme delivery and issues resolution

3. Ensuring Consistent Communications:
The PMO provides a centralised resource for ensuring that consistency in tone and language is maintained across all communications.

4. Adhering to Deadlines and Budgets:
Given its central and objective position, the PMO is ideally placed to identify and limit the potential impact of missed deadlines and imminent budget overspend, so that mitigating actions can be taken.

5. Dispersing Resources over Multiple Geographic Locations:
Where project activity is spread geographically, the PMO can act as a central contact point to ensure the smooth flow of resources between locations.

6. Promoting Transparency:
Being aware of the wider corporate and industry issues affecting the programme, the PMO can share intelligence, enabling plans to be developed to mitigate any risks arising.

7. Maintaining Project Consistency:
An effective PMO can provide consistent project management and best practice across multiple work streams, creating a platform for innovation in delivering the project successfully.

The financial services industry faces growing regulation and cost controls requiring organisations to keep abreast of changes and maintain compliant operations. In such a volatile, high risk and mutable environment, organisations can no longer afford to see projects fail or perform significantly below expectation. An effective PMO function can contribute to risk reduction and provide security on project investment.

Some organisations may regard the PMO function as an unnecessary cost overhead, given that it requires the deployment of additional resources whilst not directly contributing to delivering project outputs. The reality, however, is that by appointing an experienced, objective PMO, organisations will see clear cost benefits, as a well-managed project is more likely to come in on time, within budget and in accordance with its original scope. A 2013 survey of PMO Leads by Forrester Consulting found that 66% of respondents reported improved project performance within six months and realisation of the value of investing in a PMO function within two years of the initial investment.

As a niche management consultancy offering flexible, objective project management resources, New Link Consulting has developed a team of highly experienced PMO specialists with extensive industry knowledge and a proven track record of running successful PMO teams. New Link Consulting will work with your organisation to analyse your business requirements and build a dedicated and bespoke PMO team to keep your project on scope and deliver on time and within budget.