Performance Measurement
December 2, 2014

Project management’s next step: Leading the way in strategic execution

Last month, Canadian Government Executive introduced you to the Project Management Institute, which has advocated for project management and practitioners for 45 years. Most of you already know that project management is a means to provide better service for Canadian taxpayers at a lower cost.

You might wonder what the next step is after instituting effective project management. For many organizations, that next step involves PMOs. These entities may have been instituted as management offices (what the M and the O generally stand for) to support project, program and/or portfolio managers and their teams.

Many types of PMOs
The “P” in PMO can stand for project, program or portfolio. PMI global standards define programs as groups of related projects managed in a coordinated way to obtain benefits not available from managing them individually. Portfolios are defined as projects, programs and operations managed as a group to achieve strategic objectives.

As the project management profession matures, there has been a great deal of interest in PMOs. Because PMOs typically touch many, if not all, of an organization’s projects, and projects are often used to execute corporate strategy, PMOs are well-placed to be the conduit for executing strategic initiatives.

About a year ago, PMI conducted research to understand issues organizations run across when they build, manage and operate a PMO. Regardless of where on the spectrum the maturity of a PMO resides, a properly run PMO is essential to driving positive business outcomes.

Alignment to organizational goals is key
Quantifying the PMO from a financial basis, the research showed that the average PMO completed US$100 million worth of projects in 2012, delivering around US$71 million in value through revenue increases and/or cost reductions. Our researchers were able to demonstrate that regardless of PMO type, the alignment of PMOs to organizational goals is key to driving strategy implementation. Highperforming PMOs are more than three times as likely as their low-performing counterparts to reach their full potential in contributing business value, and four times as likely to be rated better on strategy execution.

High performers sit at the executive table
PMI identified three broad areas that demonstrate how these high performers effectively implement organizational strategy and drive business value:

• Create an organizational culture of project management;
• Continually evaluate PMO performance; and,
• Evolve and improve through knowledge management and change management.

The high-performing PMO has access to top management, according to PMI research. A report by Forrester Research clarified this further by saying successful PMOs have a seat at the executive table and a vital part in strategic planning teams.

How effective is your organization’s PMO? I welcome you to learn more about your own PMO and benchmark it against similar PMOs around the world. The PMI Thought Leadership Series is available at www.PMI.org/ PMOResearch.

 
SIDEBAR
Two Firsts! Canada Health Infoway Wins PMO of the Year in 2013
At PMI’s 2013 PMO Symposium, Canada Health Infoway became the first Canadian recipient and the first government-funded organization to win the prestigious PMO of the Year Award.

PMI received over 40 submissions for this award from all over the world. The small, not-for-profit organization, independent of but funded by the government, oversees CA$2.1 billion in public funds, and acts as a strategic adviser on a portfolio of digital healthrecord projects that have increased fourfold since 2005.

Infoway’s PMO, with five active employees in 2013, reports into the chief operating officer. Proving the value of the PMO’s strategic focus, less than four percent of projects in the Infoway portfolio have failed. “Infoway uses a phased and gated funding model, which allows for the release of funding only when pre-set milestones are met,” said Richard Alvarez, president and CEO, Canada Health Infoway. “Our project management office is central to ensuring transparency and accountability remains at the forefront of every project we invest in.”

“Our government is committed to fostering research and innovation that will help make health care more efficient and more effective,” said Health Minister Rona Ambrose. “Congratulations to Mr. Alvarez and the entire team at Canada Health Infoway for receiving this award.”

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