PMOs: New Research Shows Benefits Outweigh Cost

June 8, 2022 | by Jeannette Cabanis-Brewin

A quarter-century of working at the interface between publishing and project management has shown me that, in at least one way, project management is a lot like editing: When it is done well, it's invisible.

Perfect project delivery means ... nothing bad happened. To the outside observer (executives, for example, or users), it's like magic: your new product, event, or intiative appears. No crises, no red flags, no excuses, no problem. As an editor, I often have had writers say, "you hardly changed anything in my article!" when in fact, I'd spent hours tweaking and correcting, so I sympathize.

This dynamic, I believe, was one reason why, in the first decade that the PMO began to be implemented in organizations, we saw a lot of PMOs lose steam or funding after a couple of years. For project managers, this was frustrating. "But we were doing such great work!" they'd protest. Yes, and that may have been the problem. Two years of improved project delivery, and the bean counters would ask: "Why are we spending this money on a PMO? We don't have any big problems with our projects."

This trend was visible in our flagship research study, The State of the PMO, where, five years into the research, we saw the percentage of respondents with PMOs fall off by five to ten percentage points.

Today, however, the tide seems to have turned for PMOs. The State of the PMO 2022 results indicate that PMOs have surmounted many of their early challenges. For example:

• The vast majority of mid-size and larger firms have PMOs in place, and the majority reside at the enterprise level
• The value of the PMO is rarely questioned
• The majority of companies ascribe impressive improvements in projects and programs to the PMO:
  • 64% improvement in alignment between projects and strategy
  • 62% improvement in the number of successful projects
  • 60% improvement in the number of projects delivered on time/onbudget.

And, at the same time, looking at the cost of operating a PMO, we see that (using the ratio of PMO budget to the size of the portfolio it manages) the average PMO cost is about 5% of portfolio value. In other words, the same as it was the first time I figured this out about 15 years ago.

Between those struggling PMOs of yesteryear and today's executivel-level powerhouses, what changed? I'm guessing it was a combination of a variety of factors:

• Executives became more aware of how crucial projects are to their bottom line. PMI's intiatives to bridge the gap deserve credit here.
• Project managers got better at communicating the value and importance of their work: they stopped showing executives their Gantt charts and started relating project success or failure to corporate objectives.
• Technology improved, helping us translate project challenges and benefits directly into dashboards, with actionable decision inputs.
• PMOs stopped being the organization's methodology police, trying to teach/correct processes to people they had no authority over. Instead, they brought the projects and the project managers into the PMO and got on with it. The majority of PMOs now manage (hire, train, reward, etc.) the organization's project managers.

So, PMO leaders and project managers, you are in a golden moment. But you can't rest on your laurels. Learn more about what high-performing PMOs do (and don't do) by downloading the free executive summary report here.

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About the Author

Jeannette Cabanis-Brewin

Jeannette Cabanis-Brewin is editor-in-chief for PM Solutions Research, and the author, co-author and editor of over twenty books on project management, including the 2007 PMI Literature Award winner, The AMA Handbook of Project Management, Second Edition.

View Posts by Jeannette Cabanis-Brewin

Jeannette Cabanis-Brewin

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