In this final part of our blog series about the Project Management Office (PMO), we will show you how to measure the success of your PMO. If you already have established KPIs (Key Performance Indicators) measure them regularly you can give yourself a pat on the back. However, the majority of companies have not yet objectively assessed whether their PMO actually creates value. KPIs for PMOs? They have none.
The problem is that the PMO’s contribution to the improvement of the project management landscape is generally underestimated. This is the reason why the department, despite initial excitement, are often dissolved relatively quickly. However, if PMOs are given a chance and regularly evaluated, they can bring great improvements.
But how do you measure the performance of a PMO to prove its worth?
Why KPIs Are so Important for PMOs
Nearly half of PMOs are eventually abolished because it is thought that they do not bring enough value to the organization. Most stakeholders focus on the cost, bureaucracy and organizational changes that a PMO brings. But is this a mistake? After all, there are numerous examples showing the opposite. Companies that measure the success of the PMO see unrivaled project performance. Plainly speaking, this means less project failure, higher productivity and lower project costs.
It is clear that PMOs themselves should prove their value by tracking appropriate metrics and always look for ways to improve. Tip: Get help from an external consultant to get the most accurate results. The metrics you need to measure the PMO performance depends primarily on the role and the task spectrum of the Project Management Office.
When you start measuring success, you define the relevant metrics and reporting periods together with the stakeholders. It is also important to record the initial KPIs (if possible prior to the introduction of the PMO or shortly afterwards). This allows you to use comparative values later and follow the development since the start of the PMO.
The most common KPIs for PMOs are summarized in the following list:
KPIs for PMOs – What Applies to Your PMO?
|Improved Project Completion||Ratio of successfully completed projects to all projects in the portfolio (per period)|
|Ratio of successful, strategically important projects to all strategically important projects in the portfolio (per period)|
|Ratio of successfully completed, strategically important projects to all projects in the portfolio (per period)|
|Improved Predictions||Ratio of estimated project costs to actual costs|
|Ratio of estimated project duration to actual duration|
|Improved Stakeholder Satisfaction||Average customer satisfaction compared to previous years|
|Average project employee satisfaction compared to previous years|
|Faster Time-To-Market||Time elapsed between project conception and project start compared to previous years|
|Time elapsed between project conception and project completion compared to previous years|
|Percentage of projects that have the same progress over X reporting periods|
|Improved Resource Management||Number of training courses completed compared to previous years|
|Relationship of internal project leaders/specialists to externally recruited project leaders/specialists|
|Number of employees who are assigned to several projects at the same time|
|Number of projects with resource conflicts compared with previous years|
|Improved Project Management||Time elapsed between the occurrence of deviations, risks, conflicts and/or corrective actions|
|Proportion of active projects without conclusion of contract or placing of order|
|Percentage of project status reports older than X days|
|Relation of projects with complete documentation compared to projects without documentation|
|Optimized Finances||Analysis of the annual ROI of all projects coordinated by the PMO|
|Percentage of projects under the agreed budget (compared to previous years)|
Just Ask Your Employees
The success of your PMO cannot only be measured quantitatively. Ask your project employees and project managers about the PMO and its impact. This provides information on the current level of acceptance.
Possible yes or no questions for such a qualitative measurement are:
Is the PMO a time saver for you?
Does the PMO make work easier for you?
Are you aware of the portfolio’s priorities?
Does the PMO promote cross-project communication and transfer of information?
Do you feel the PMO supports you in resolving resource conflicts?
Are the predefined PM methods useful for you?
Are the training courses offered helpful?
You should definitely give your new PMO the chance it deserves. Also, encourage your employees. If the department isn’t providing enough value, try to get to the bottom of the problem – it could actually be due to perception.