How the Presence of a PMO and EPMO Can Increase Project Success Rates

The latest Pulse of the Profession^® research, conducted by the Project Management Institute (PMI), shows a positive change in the way organizations are managing projects and programs. More projects are meeting original goals and business intent, in addition to being completed within allotted budgets.

However, completing a project on time and on budget means nothing if the goals of that project are not aligned with the overarching strategy of the business. This is where a project management office (PMO) and an enterprise project management office (EPMO) can help improve business strategy. PMOs and EPMOs are responsible for:

• Aligning the project management portfolio to strategy
• Navigating the risk of projects
• Driving benefits realization
• Monitoring progress and optimizing delivery of strategy
• Managing talent
• Enhancing governance and accountability

According to PMI, organizations that complete 80% or more of their projects on time and on budget, meet their original goals and business intent and have high benefits realization maturity are known as “champions” or elite organizations. Champion organizations understand the strategic importance of a project management office and experience cost savings due to successful project performance. More than 80% of champion organizations have a working PMO.

Conversely, organizations that complete 60% or fewer projects on time and on budget, meet original goals and business intent and have low benefits realization maturity are known as “underperformers.” Underperforming organizations waste nearly 28 times more money due to poor project performance compared to champion organizations. Moreover, less than 60% of underperformers employ a working PMO.

An enterprise-wide project management office is also important, as 56% of champion organizations reported having an EPMO aligned to business strategy, compared to only 12% of underperforming organizations. According to the report, organizations that have a strategic EPMO have 38% more projects meet original goals and business intent and 33% fewer projects considered failures. Employing a PMO and EPMO and having them work together can help organizations bridge the gap between high-level strategic vision and implementation.

PMO vs. EPMO

It’s important to understand the responsibilities assigned to the PMO and EPMO before determining how each office best fits within the organization.

PMO

The PMO serves as the backbone of a business’s project management approach. It provides decision support and ensures all business change is managed in a controlled way. Experienced PMOs provide the following:

• Governance – This involves peer reviews, audits, developing project structures and ensuring accountability. The PMO is also responsible for ensuring decisions are made by the right people, based on correct information.
• Transparency – A PMO makes sure all information is relevant, accurate and always available to decision makers.
• Reusability – PMOs should be providing teams with templates, best practices and lessons learned based on previous project experience.
• Delivery support – Another important job of the PMO is reducing bureaucracy, providing training, mentoring and quality assurance.
• Traceability – The PMO is responsible for maintaining documents and other important information regarding the evolution of a project.

EPMO

The EPMO operates at the highest level of the business and oversees all enterprise-wide projects. All PMOs report to the EPMO.

The role of the EPMO typically includes the following responsibilities:

• Mentoring project managers
• Making sure projects align with overall business strategies and goals
• Tracking how individual PMOs work together to provide value for the organization as part of a larger business initiative
• Resource management and standardization, the latter of which ensures all the various departments across an organization speak the same language regarding business projects
• Coordinating the efforts of various PMOs

Why Both Project Management Offices Are Critical To Success

According to The State of the Project Management Office 2016 report, the biggest challenges faced by a PMO include having their costs seen as overhead, resistance to change within the organization and having to demonstrate the value or ROI of employing a PMO.

An EPMO can offer assistance in those areas. While PMOs typically work at the department level, an EPMO focuses on the alignment of project goals with the strategic initiatives of the business. PMOs operating alone often lack strategic alignment, which can hurt the business and decrease the value of having a PMO in the first place. At the end of the day, a PMO and EPMO working together can bring visibility and prioritization to the projects occurring across all departments of an organization.

Pulse of the Profession is a registered mark of the Project Management Institute, Inc.