WHAT'S YOUR PMO EFFICIENCY RATING?

IN THIS ARTICLE MATT ROBINSON A DIRECTOR AT CONSULTING FIRM ESCIENT EXPLAINS WHY IT IS IMPORTANT TO MEASURE YOUR PMO EFFICIENCY.

There’s no doubt PMOs are feeling the pinch. The number reporting they will be downsizing is increasing year on year. Efficiency measures are critical in times like this when companies are trying to ensure value for every dollar spent. PMOs are being forced to prove their worth by helping the business to re-assess, re-value and re-prioritise projects in response to the changes brought about by COVID-19.

WHAT’S IN A NAME?

Many organisations are steering clear of the term Project Management Office (PMO) altogether these days. The move to Agile and focus on benefits and value has seen the rise of terms such as Value Realisation Office (VRO), Transformation Office, Agility Office and many others. Call them what you will, the need within organisations for the functions PMOs have been providing isn’t going away.

HOW DO YOU MEASURE THE EFFICIENCY OF A PMO?

Each year Escient compiles and publishes a survey of Australian PMOs. The PMO Efficiency Rating is a new addition to the survey results this year. The PMO efficiency measure enables organisations to benchmark their PMO against other similar PMOs. Escient’s approach uses data from hundreds of responses over three successive annual surveys. Our own research and experience, shows the main factors to take into account in determining PMO efficiency are:

• The number of PMO FTEs

• The number of functions performed

• The size/value of the portfolio the PMO oversees

• The type or style of PMO – i.e. whether Supportive, Controlling or Directive

(Source: Escient)

Weighting is applied to each factor and the data set is normalised to provide a percentage efficiency score. Currently, the model counts the number of functions the PMO offers but in addition Escient has identified the issue of how well or to what extent each function is provided. For instance, almost all PMOs claim to provide Consolidated Reporting, however there’s no doubt that there’s a massive variation in what that means – the type, nature, frequency and method of reporting as well as what’s reported and how much accuracy is verified for what’s reported.

IS EFFICIENCY THE ONLY KPI?

Of course ‘efficiency’ isn’t a be-all and end-all measure and there are many factors that can influence the effectiveness of a PMO. Depending on the nature of an organisation and class of its PMO, an organisation may also want to look at measures such as size and cost of projects successfully delivered, total value delivered and stakeholder satisfaction.

Escient recognises that PMOs come in all shapes and sizes and the genesis of PMOs are equally varied. Many are formed and tasked with solving a very specific issue. This could be improving and standardising project delivery capability, raising visibility of resource allocations, gaining a consolidated project financial summary or a myriad of other initial drivers.

CONCLUSION

Escient determined an average PMO efficiency rating of 68% across all industries, types and sizes of PMOs. However, there is an enormous range in the PMO efficiency scores. Many PMOs achieved 100%, based on factors such as toolsets, type, headcount and the manner in which functions are provided. But there is no doubt that some PMOs are simply more efficient than others.

Ensuring your PMO is operating at peak efficiency is important at the best of times but even more critical when organisations are under pressure. Quality is of course equally important and it’s imperative PMOs can show they are offering functions in demand by their organisation, efficiently and to a level of quality that satisfies this demand.

Author: Matt Robinson is a Director at Escient and author of their annual PMO survey. He has built a strong career managing the delivery of large, complex projects and advises clients on PMO setup, uplift and management.