Is PMO-as-a-Service the solution to rising failure rates?

In Part 1 of a discussion series, Chris Greenway explores the PMO-as-a-Service trend.

©iStock.com/mvkazit 

©iStock.com/mvkazit 

I recently completed an RFQ for a client in response to Project Management-as-a-Service (PMOaaS). This has been one of many PMOaaS proposals in recent times – if it was a hashtag, it would be ‘trending’. But few seem to really understand it.

One common thread is apparent, many do not really know what they’re asking when they set the criteria for PMOaaS. What we do know is that most PMOs fail – and the recent trend of PMOaaS is an attempt to remedy some of these damning statistics:

  • 50% of project management offices close within 3 years (Association for Project Management)
  • Since 2008, the correlated PMO implementation failure rate is over 50% (Gartner Project Manager 2014)
  • 68% of stakeholders perceive their PMOs to be bureaucratic (2013 Gartner PPM Summit)
  • Only 40% of projects met schedule, budget and quality goals (IBM Change Management Survey of 1500 executives)

To understand why this is the case, we need to take a look at how most PMOs are formed. From the start, nearly all PMO implementations begin by pitting ‘us versus them’.

The first scene: taking sides in a PMO implementation

There we were at the precipice. The strategies were drawn up and the plan of attack communicated.

Ahead of us was the coming together of the unwavering steadfast barricade versus the unstoppable moving force. There was a foreboding for the impending engagement. Was it right vs wrong, good versus evil, history versus evolution?

One thing was for certain, failure was not an option. What has been determined must be brought to bear.

The first target was struck, without missing a beat the counter measures were deployed…. And so it continued for hours, it was a bloodbath, they had come prepared. This was going to be a long encounter!

The scene above sounds dramatic, but it illustrates the differing sides of an implementation. I have been a part of trying to implement, a part of being implemented to, and a part of an advisory group assisting the implementation of PMO’s through many organisations. This may be a dramatic description of the implementation of a PMO strategy, but it is not far from how those trying to implement it feel. It does help explain some of the statistics on PMO failure rates.

Why are the statistics so bleak?

The dozens of PMOs I’ve worked with, or for, usually fit into two categories, each with common issues:

Category one: the in-house PMO

The PMO is staffed with internal process type staff, often a predominance of lower level and inexperienced resources, who have little or no background delivering projects.

This arrangement is often because the project managers are out running the projects, with no time for the PMO role. Unfortunately, most organisations will baulk at their best project managers doing process work. They need them to deliver results to the business. If the PMO team lacks experience, they may not receive the respect of battle-hardened project managers.

And if the team tend towards inward focused administration they may only provide a passive source of data for project managers, rather than pro-active support.

Project managers can come to resent the PMO ("who are they to tell me how to manage a project?"). In addition, ambitious go-getter types will be keen to move on rather than get stuck in an environment with limited prospects.

These types of cultural issues are common and a PMO in this environment is doomed to fail from the outset.

Category two: the outsourced PMO

A common problem is that every organisation has a different culture and political climate. External consultants may provide expertise and industry best-practice, but they will not have the experience of delivering projects within this particular organisation.

Once again, the experienced project managers will often recognise this and resent the PMO for having consultants "tell them how to manage a project”.

Issues can also include a loss of control over quality and resources, often for an extended contractual period.

A change in Mindscape

A change of thought process for PMOs is needed. I really like a book which is simple in its structure but powerful in its message. Who Moved My Cheese? by Dr. Spencer Johnson is a great example of how to shift thinking.

How can we avoid “Humming” and “Hawing” and instead “sniff” out and “scurry” into action to make a PMO more successful?

Moving to a Co-sourcing Model

Co-sourcing combines both of these models to provide the best of both worlds – this is the type of PMOaaS that will produce the best results – best practice advice and support for internal resources.

It is a partnership in which the client and service provider collaborate to create teams that provide support across the PMO. Support is delivered as a service over an extended period of time, typically a minimum of 3-5 years. These teams can be located at the client’s site, remotely or both, depending on the type of support being provided. Benefits for the client are:

  • Quality. Focus from the service provider on maintaining a consistently high level of quality. Such engagements must provide access to skilled resources and quality infrastructure.
  • Control. It allows the client Managers to retain control across business functions, including outsourced processes. The service provider becomes an extension of the Managers existing business. This helps ensure seamless delivery of processes in line with desired quality and timelines, using the same underlying processes and technology platform.
  • Independence. Managers have third-party independence of external consultants to mitigate conflicts of interest and control.
  • Scale. Changing demands and regulatory pressures pose operational and budgetary challenges. Operating models must enable managers to leverage and manage significant increases in resource and complexity through economies of scale and flexibility.
  • Economics. Managers are seeking solutions that will provide reduced expenses and convert fixed costs to variable costs without compromising on scalability or quality.

How do you best implement PMOaaS?

A co-sourced partner can provide a great variety of services and strengthen your PMO’s quality and accreditation level. Look out for my next piece with key tips for running PMO-as-a-Service, using a co-sourcing model...

About the Author

Chris Greenway is a Senior Consultant at CSC Consulting with extensive experience, predominantly in the IT industry.

His career started in Sport and Event Management, including 6 years employment at the Australian Olympic Committee and selection onto the Sydney Olympic Team as an official.

He has in-depth knowledge of Project and Program Management including a Masters of Project Management, and experience with PMBoK®, PRINCE2® and MSP®.