Measure the Success of Your PMO (PMO Part 4)

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. You may think measuring success is just calculating project completion rate or some other Key Performance Indicator (KPI), and while this is important, to truly understand the success of your PMO, you’ll need to dig a little deeper. So, grab a shovel and let’s get started.

Why KPIs Are so Important for PMOs

Firstly, we need to emphasize how important it is for PMOs to demonstrate their success. So many PMOs are dissolved because companies don’t believe they provide value. This happens not because the PMO isn’t valuable, but because measuring and communicating its value can sometimes be difficult. When you can accurately measure the success of your PMO, you can ensure that it remains a permanent fixture in your company.

Basic KPIs

There’s no shortage of KPIs that your PMO can be measured by. But rather than measuring the success of your PMO by every KPI conceivable, decide which ones matter the most to your organization and its goals. Your organization may be really focused on resource utilization and care less about the average time it takes a project to get to market. If you’re not entirely sure where to start, here are a few basic yet powerful metrics we suggest:

• Percentage of Completed Projects - This looks at how many projects are actually completed versus how many projects your organization originally planned for. To look at this more in depth, you can also consider how many strategically important projects or projects most highly aligned to your corporate strategy were completed.
• Percentage of Projects Completed on Time - It’s great to finish a project, but it’s even more important to finish projects on time, particularly when there are other project dependencies and few additional resources available. The percentage of projects completed on time can help you understand if your planning is realistic or if there are issues that arise during project execution that delay projects.
• Percentage of Completed Projects within Budget - No one likes a project that’s over budget. PMOs should be able to facilitate the planning and execution to make sure projects are completed within their determined budget. The percentage of completed projects within budget compared over previous time frames can be an extremely powerful success metric.
• Resource Utilization Rate - This refers to how much employee capacity is actually planned or used on projects. If your resource utilization rate is over 100%, then you have employees working overtime. If it’s well below 100%, you have employees who have extra time on their hands. It’s important to have a good resource utilization rate (between 80% and 100%) because over-allocated resources can cause project delays and increased budgets while under-allocated resources aren’t being utilized efficiently and opportunity is there for them to better contribute to company growth.

More Than Numbers

You can measure the success of your PMO with strict numbers, but if that’s the only way you evaluate and measure success, you’re likely leaving a lot on the table. We recommend a few other success metrics that are a little more qualitative, but still incredibly important. The best way to measure these metrics is to survey project managers, stakeholders and other people in your organization regarding each metric. You could do this in person or create an online survey. The survey can be as simple as rating each metric on a scale of one to five or you could ask for written feedback. However you decide to collect data on these metrics, it will provide insight into how successful your PMO is.

• Confidence Level in Data - This is something we’ve noticed in nearly every successful PMO – they are confident in their data. They know the project and resource data they receive, manage and communicate is accurate. If you’ve ever managed more than several projects, you know how difficult it can be to create flows of accurate information. PMOs use processes and regular communications to collect data so decision-makers at all levels can make informed, data-driven decisions.
• Level of Transparency - One of the greatest assets a PMO can bring to an organization is transparency. Transparency into projects can help upper management understand why a project has slowed down, but the transparency brought by a PMO can also illuminate other things. A PMO can help everyone in the organization understand how much time employees spend on run-the-business work or which projects don’t contribute to the company’s goals. When a PMO creates transparency, no one is left in the dark about why or how things are done.
• Standardized Processes - There’s sometimes a negative connotation to “processes and procedures” but we can’t stress enough how crucial it is to have some processes in place for your organization. While you don’t want to burden people with unnecessary processes, your organization does need them for things like new project intake and resource conflict resolution. Processes keep your organization moving forward, so creating and communicating them across your organization is vital.
• Level of Alignment - In many companies, if you asked a randomly selected employee what the company’s top priorities are, they likely wouldn’t know the answer. This is because decisions are often not communicated or not communicated well throughout the organizations. A PMO can help create alignment throughout organizations so that everyone understands the company’s strategy, long-term goals and top priorities. In turn, this helps people understand what needs to be done or should be done to keep the company moving forward.
• Level of Satisfaction - The PMO is meant to alleviate frustrations. This means resolving resource conflicts so employees aren’t over-allocated, helping upper management understand the tradeoffs of approving certain projects and removing roadblocks for project teams so they can do their job. When the PMO functions correctly, people in your organization will see that the PMO makes their job easier, saves them time, helps them complete projects and helps teams make better decisions for better outcomes.

PMO Power

If given the chance, a new PMO can add measurable and meaningful value to your company. Many companies struggle with the implementation and adoption of a PMO, but if you work through the challenges you can obtain the rewards offered by efficient and successful PMOs. In order for PMOs to provide value, they need powerful tools to manage their project portfolios. Meisterplan supports PMOs by providing real-time scenario planning, easy resource allocation, and clear visuals into your project portfolio. You can align your business strategy and goals with projects in multiple portfolios, see clear dependencies, and monitor project financials all in one place. To see how Meisterplan can help your PMO be successful, you can schedule a one-on-one demo or start a free trial.