PMO Capability Evaluation
What is a PMO?
A PMO, or project management office, centralizes the project management function and defines and maintains standards for project management within an organization.
It can be beneficial to think of a PMO as an entity with two dimensions: breadth and depth.
Breadth focuses on capabilities, the key tools and knowledge areas within the project management discipline that enable the project’s successful execution. Depth, meanwhile, refers to performance and the consistency of achieving results. Here, we adopt a standard from Carnegie Mellon’s Capability Maturity Model and can rate a PMO’s maturity on a scale of 1 to 5.
Level 1 – Initial establishment with inconsistencies
Level 2 – Structured process and standards
Level 3 – PMO process institutionalized
Level 4 – Integrated across the organization
Level 5 – Optimized for high-performance
Why Conduct a PMO Capability Evaluation?
Over time, PMOs frequently become sub-optimized. A periodic evaluation of your PMO provides an opportunity to ensure that the PMO remains focused on excellence of project execution. Even slight improvements in overall project execution can result in exponential improvements in value realized.
Some PMO improvements can be difficult to measure directly. For example, how does one effectively measure the value of good decisions, retention of star performers, or improved communications? With the right design, however, organizations can effectively measure a PMO’s ultimate outcomes: business results and a solid reputation for delivery. Once optimized, a PMO should expect to achieve an ROI of 30-50% in Year 1 with subsequent incremental increases of 10-25% a year. Highly tuned PMOs can achieve and ROI of over 200%. In one particularly successful engagement, our client established a return of 500% in three years. Our evaluations provide specific recommendations on improving performance at all levels, from the PMO level down to the individual project level.