Indeed, all businesses can relate to this quote since they strive to walk along with the novel technology and trends and stay relevant in the long haul. The same goes for the PMOs

A PMI research states that-

More than 55 percent of PMO directors say the charter for their PMO has changed in the past five years.

Traditional PMOs have focused on overseeing the tactical activities of a program, project, or portfolio following the same old reporting standards and charts. As a result, organizations still relying on this conventional form have failed to adapt to change and have fallen short of their potential.

In today’s business landscape, PMOs need to be seen as transformational and leading edge rather than being a support system or an administrative body. Thus, they have to be more receptive to technological innovation and take on a more authoritative position to scale up business efficiency and profitability.

If there’s anything that is at the core of maintaining the resource health index and delivering projects successfully, it’s a value-driven PMO!

In this blog post, we’ve compiled some strategies to transform PMO rightfully as a value-producing entity.

How does a value-driven PMO differs from a cost-based PMO?

A PMO is the nerve center of a project-driven business. It takes on various functions such as supportive, controlling, and directive as per firm requirements.

As PMOs are changing and evolving their remit. So, what distinguishes the modern-day value-focused PMO from the traditional or a cost-based PMO?

Let’s see,

Traditional PMO

The conventional role of the PMO is to improve operational efficiency by performing activities such as creating business cases, maintaining reports, logbooks, etc. However, traditional PMOs focus only on annual planning and follow a ‘one size fits all’ approach instead of being agile. Thus, they are not well equipped to deal with the changing market demands and client requirements.

The major setback of the traditional PMOs is that they don’t continually evaluate the strategic competence of the projects. Instead, they focus on completing administrative or operational activities to reduce the workload of project managers.

Modern PMO

In today’s highly competitive business landscape, the role of a PMO is no longer limited to performing administrative functions. A modern-day PMO serves more than just ensuring timely project delivery or functioning as a cost center for the project-based business. Instead, it acts as a value-centric profit center by maintaining a degree of control or playing a directive role in project management.

It ultimately regulates the projects by being actively involved in project selection, assigning a project manager who reports back to the PMO, framing project and resource management strategies, maximizing productive utilization, and, most importantly, meeting the firm’s strategic objectives.

In a nutshell, a value-driven PMO with its high governance and control manages every aspect of the project from the start until completion. This is why forming a value-driven PMO is the need of the hour.

Now that the importance of having a value-centric PMO is established, let’s address another pressing question.

Who runs or governs the Program Management Office? – The Program Director

The concerned person is responsible for looking after all the activities within the PMO at a granular level. From selecting the right projects that drive profits to taking a holistic view of all projects and assisting project managers, they cater to all.

Let’s look at the roles and responsibilities of the program director in detail here.

What is the role of the program director in PMO?

The Program Management Office (PMO) ensures that business project operations are executed effectively and efficiently. The program director is in charge of developing and maintaining project management methodologies, putting in place the appropriate tools and technology. They are certified professionals with more than ten years of experience as a Senior Program Manager, Project Manager, or PMO Officer.

The program director’s key role dimensions include:

• Creating and managing a project/program management office (PMO).
• Developing ways to monitor and control the multiple project delivery cycle.
• Supervising and ensuring that hiring and staffing needs are met in accordance with program goals and project demands.
• Ensuring that the PMO fulfills performance goals and other KPIs.
• Work as a strategic adviser for project prioritization with corporate leaders.
• Manage the risk, and change resolution processes, and work with the appropriate authorities to take corrective action as necessary.
• Extend necessary support to Project Managers to deliver projects/programs on time, within the scope, and on budget.

Before understanding how to build a value-centric PMO, let’s first look at its primary functions and how they help deal with the pressing challenges.

How will a value-driven PMO solve project and resource-centric challenges?

A PMO can don multiple hats, and its benefits typically differ from business to business, depending upon its nature, size, and goals. However, on common ground, a PMO is focused on delivering value, and it also provides managers necessary support to combat the specific challenges.

Here is an overview of how a value-centric PMO can help managers mitigate several projects and resource-related challenges.

Facilitate project selection and prioritization

The projects that a company undertakes decide the firm’s profitability and help to achieve long-term business objectives. The PMO is crucial in developing standard project selection criteria to evaluate and analyze each project. It allows you to take up profitable and strategically aligned projects and ensure that your company’s resources are utilized at the right place.

If any initiatives fail to satisfy the organization’s objectives, resources will be wasted, negatively impacting the bottom line. As a result, one of the most important roles of a value-driven PMO is to prioritize and choose projects.

Define and formulate project management methodologies

PMOs define and implement project management methodologies based on the project’s nature and attributes. It allows them to standardize project-related activities and processes for the specific project teams. In simple terms, the project manager will have better clarity on how a project should be managed throughout its cycle, from creating initial business cases to delivery management.

For instance, a PMO may favor linear delivery methodologies such as the Waterfall approach or prefer a more Agile delivery framework. They may also select a hybrid process by choosing the best practices from both waterfall and agile. Thus, implementing these methodologies and standardizing the project metrics across all business units minimizes the chances of discrepancies and helps to improve overall project performance.

Streamline resource requisition workflow

After projects have been selected and prioritized, it is critical to find and assign competent resources to suitable opportunities. Thus, PMO serves as a central point of contact in resource requisition workflow and keep track of the audit trail for better transparency.

Depending on the project managers’ estimation, resource managers can fill the open positions based on project priority. Moreover, in case of any internal conflicts for critical resources, PMOs can intervene and help to find common ground with project managers, using the audit trail effectively. In addition, when an automated requisition workflow is followed, PMOs can leverage that to foster a shared service model.

Optimize resource schedules for better utilization

As stated earlier, the Project Management Office acts as a vital link between project and resource managers and plays an integral role in maintaining the resource health index. Since under or overutilization of resources can lead to missed deadlines, lower productivity, employee burnouts, and even attritions, PMOs keep track of forecast vs. actual resource utilization levels.

If they spot any red flags, they direct the managers to take suitable resourcing measures to solve the issue. Additionally, resource managers can coordinate with the project managers and implement the right resource optimization technique to optimize the resources’ schedules while keeping the project constraints in mind.

Bridge the skill gap to futureproof the workforce

Since value-driven PMOs are directly involved in project-related activities, they proactively gauge the resource demand for the pipeline projects in the opportunity or approval stage and evaluate the skills gap. Then, in order to bridge this gap and diversify the workforce’s skill set, they implement necessary training, upskilling workshops, conferences, or provide other learning modules and support to the respective teams. This allows PMOs to futureproof the workforce and enables them to accomplish more diverse projects with fewer resources.

In addition, the project managers are also given formal leadership and other project-related training to ensure effective project management. All these initiatives benefit both the managers and teams by keeping them abreast of industry best practices, emerging methodologies, or management techniques. It also increases the sustainability of the firm and helps maintain a competitive edge.

Oversee project delivery cycle

Instead of directly managing projects, PMOs provide expert assistance and audits the project delivery mechanisms. They track the milestone completion and ensure that all bottlenecks are addressed in a controlled way. Moreover, they also ensure that any scope change is first communicated and seek approval from the change control board before implementing them.

Their main aim is to facilitate project success and ensure on-time project delivery within a specified budget. For instance, if the PMO observes any cost escalation or delay in achieving the milestones, they intervene and take necessary steps to bring the project back on track. Moreover, PMOs implement essential tools and technology to get these updates in real-time and with precision.

Develop an overall resource risk management plan

A Project Management Office plays a vital role in creating a resource risk management plan so that the project does not suffer. They stay abreast and coordinate with managers to mitigate issues such as loss of employee productivity, shortage of resources, skill gaps, unplanned absences, or retirement. PMOs also help managers conduct succession planning if they foresee any critical resource leaving the organization and keep their projects on track.

In addition, they capture and disseminate the lessons learned around completed projects into the repository for future reference. Finally, they make sure the firm doesn’t make the same recurring resourcing mistake over and over again.

H. Build reusable assets and apply them to different projects

For strategic alignment and effective portfolio management, the organization must reuse the assets from the inventory meticulously. This approach reduces project management costs and acts as a time-saving strategy. For instance, if a particular project builds a specific tool, the PMO preserves the same in an inventory, thus creating an asset. Going forward, if another project needs the same tool, the PMOs can provide this as a reusable asset and assist project managers in adapting to it.

Moreover, PMOs consolidate all project-related data and documents it into a central database. They can deploy a cloud computing system to keep the back-ups and security in check and provide them to the managers when they undertake similar projects.

Procure the right tool inventory to speed up project activities

The Project Management Office is responsible for selecting and implementing the right tools and technology to speed up and streamline project management activities. These tools are purposely designed to break down projects into a series of phases, automate repeatable tasks, and foster seamless team collaboration.

For instance, using the resource management tool, PMOs and concerned managers can access the real-time reports on various resource metrics (utilization, availability, forecast vs. actual, etc.), consolidate the data, and make data-driven decisions. It also features simulation functionality (what-if analysis) and advanced analytics to improve resource planning. This also helps increase productivity, form the best-fit resource plan based on project constraints, and optimize resource utilization.

The functions outlined above can be described as the core activities of a majority of PMOs. Now, let’s talk about how a resource management solution can become a significant game-changer for a value-driven PMO.

How does resource management help a value-driven PMO?

All the planning in the world won’t make a difference unless we schedule the right resources for the right project at the right time. As efficient and intelligent utilization of resources decides the bottom line of the firm. Companies and PMOs can effectively leverage project resource management software and ensure productivity and profitability.

Foresee pipeline project demand through capacity planning

The PMO’s primary responsibility is to ascertain that every project is executed with due diligence and without last-minute firefighting. Resource management tool with integrated capacity planning solutions provides foresight into the resource demand based on which managers can forward plan pipeline projects.

Moreover, they can also find the resource excesses and shortfalls using the capacity vs. demand report and take appropriate measures to bridge the gap.

Ensure timely project delivery with competent resource allocation

An effective resource management solution provides unmatched visibility into the resource attributes such as skills, location, experience, availability, utilization, etc. Thus, using an advanced filter, resource managers can ensure competent resource allocation.

At the same time, the real-time updates in the multidimensional schedules allow PMOs to oversee the workforce allocation on multiple projects. In case they notice any discrepancy in allocation or scheduling, they coordinate with the resource manager to course correct the situation. This enables PMOs and managers to ensure successful project delivery within time and budget.

Minimize the complexities of matrix boundaries

In matrix organizations, resources have multiple reporting lines, I.e., they have one or more managers. This can create many resourcing complexities, such as scheduling conflicts, as every project manager will deem their project critical. However, this situation can be tackled using a resource management tool. PMOs can ensure that cross-functional teams are formed seamlessly based on the project’s criticality.

In addition, the tool provides 360-degree visibility of every resource-related data. This helps managers evaluate resource availability, skill-matrix and allocate the best available resources to the right task at the right cost. It is particularly useful for critical resources that have to be shared across projects.

Get Real-time insight into useful resource metrics

A modern resource management solution gives you real-time insight into the various resource metric from availability, utilization to capacity vs. demand, etc. This is particularly helpful in a multi-project environment as the concerned authorities can view all the data-driven insights to take corrective actions ahead of time.

PMOs can assess the resource performance on a timely basis by following the real-time reports. This includes heat maps on resource utilization which gives accurate information about billable, non-billable, and strategic utilization, resource availability reports, planned vs. actual metrics, and so on. Then, leveraging the data, they can direct resource managers to form a course action plan ahead of time to secure the project’s fate and regulate the resources’ health index.

Ascertain effective bench management

An ideal PMO aims to significantly reduce the idle time between projects and ensure their human capital generates enough revenue or adds value rather than being on the bench. For instance, when resources end up on the bench, their billable utilization gets affected. Therefore, one must stay ahead of schedule and know which resource will likely end up on the bench.

With advanced forecasting solutions in place, resource managers can actively propose resources to other projects before they hit the bench and manage ramp-down activities well. If the PMOs see an unusual increase in bench size or witness bench aging, they can intercept and adjust project timelines or escalate strategic work.

Minimize last-minute hiring/firing cycles

Last-minute firefighting for resources is harmful in 2 ways. For one, it escalates project resourcing costs, and for two, managers may have to settle with a less-qualified resource just to begin the project proceedings. The tool can minimize these cycles by forecasting project requirements ahead of the curve. It will help managers to find the skills gap in advance and ensure planned hiring. PMOs can predict this demand, evaluate the project resource plan, and signal the resource managers to initiate resource planning.

This way, resource managers get enough lead time to procure the best-fit talent for the project and the firm. It also eliminates wrongful hiring that affects the project’s quality and output. Thus, before the project initiation, PMOs can ensure that they have the right resource mix for the projects.

This way, resource management can be a great value addition to the PMOs in two crucial ways: by centralizing enterprise-wide resources and allowing PMOs to form a data-driven project resource management strategy.

Conclusion

Each organization has its own programs and initiatives with its unique strategic goals. Therefore, the importance of a PMO to upkeep organizational efficiency and excellence cannot be understated.

According to PMI, even during the covid times, PMO acted as the resilient bridge and helped project teams sail through these unprecedented times seamlessly.

If your business has always viewed your PMO as an expense instead of an asset, it is time to start examining how you can reframe your perspective, follow the aforementioned insights to build a value-driven PMO, and articulate your business to drive success.

The Glossary

The SAVIOM Solution

SAVIOM is the market leader in offering the most powerful and configurable solutions for managing enterprise resources efficiently and effectively. Having more than 20 years of experience, this Australian-based MNC has a global presence in over 50 countries. It is also popular with more than 100 customers and helps them achieve their business goals. SAVIOM also has products for project portfolio management, professional service automation, and workforce planning software which can be easily customized as per business requirements.

“84% of executives say that constant innovation is important to their growth strategy.”

Moreover, in today’s world, where every company seeks perfection and regularly incorporates current trends, maintaining this consistency has become even more significant. Otherwise, it will be challenging for businesses to stay ahead of the competition.

To keep up with the novel market trends and maintain continuous innovation, businesses must have standardized processes devoid of defects or discrepancies. Moreover, these processes should be non-ambiguous and should be developed to deliver value to the customer. Only then can companies thrive and stay relevant in the long haul.

But, the question is, how can you achieve this?

The solution is- ”Operational Excellence.”

This blog will highlight every component needed for achieving operational excellence. Besides, it will also tell how you can upgrade your business processes and build a solidified presence in today’s competitive world.

But first, let’s begin with the definition.

What is Operational Excellence?

Operational excellence is the process of executing a business strategy consistently to lower operational risks, costs and increase revenue. The first step towards achieving organizational excellence is building a standardized and efficient process to ensure that the organization is running smoothly. The goal is to develop a culture of “operational discipline,” i.e., create an enterprise-wide management system with the ideal flow.

It is needed more than ever in today’s rapidly changing business models where organizations need to undergo end-to-end business transformation. Besides, it also helps meet customer expectations as it catalyzes improving the organization’s system and culture.

Now that we know what operational excellence is, let’s understand the difference between operational excellence and continuous improvement.

Continuous Improvement vs. Operational Excellence

Continuous improvement is the ongoing effort made to enhance an organization’s processes, products, or services. Often, in this process, the senior management will set a goal, and the employees will make necessary changes in their areas to achieve it. Following this, the management will develop another new plan, and this cycle will continue year after year. Simply put, continuous improvement is a never-ending process of getting better, but it doesn’t have any specific end goal.

However, since market trends keep changing, organizations need to refine their processes, products, or services. This is where operational excellence comes in.

Operational excellence helps the enterprise embrace certain principles and tools that guarantee sustainable improvement in the processes. As a result, it assists the company in eliminating every defect and delivering excellent results to the client. Furthermore, with operational excellence, the company can create an innovative culture that will help achieve long-term growth. In a nutshell, operational excellence helps the business deliver the best results and maintain client satisfaction.

Significance of Operational Excellence

An operationally excellent process offers significant advantages to the business. As per the Harvard Business Review,

“Companies with peak operational excellence have 25% higher growth and 75% higher productivity than those who don’t.”

Here are some of the reasons why it is so important:

• Makes you agile and adaptable to change: A solid operational excellence framework makes you more adaptable to market changes. As customer demands change, economies are disrupted, and new technologies are introduced, and thus you’ll need a flexible and agile system to stay resilient. Operational excellence allows building strategies that enable you to combat any business upheaval.
• Ensures that the process, guidelines, tools are followed in every project: An operational excellence team ensures that the process is refined and every defect or bottleneck is eliminated. To do so, it formulates standard guidelines and protocols for process improvement. Moreover, it ascertains that the approved process is followed and implemented across every project within the organization.
• Helps create an efficient workforce: One of the primary objectives of the operational excellence team is to utilize the resources most efficiently to control resource costs. This has both large and small impacts on your business. Along with protecting the profit margin, it helps increase productivity, accountability, performance, etc., thereby creating an efficient workforce.

Principles of Operational Excellence

As discussed earlier, an operational excellence team is formed to look after the processes and ensure systemic perfection in every organization. To achieve this goal, the team has to follow certain principles and ensure every manager and employee is on board with the process.

Here is a list of the fundamental principles that every member of the operational excellence team has to abide by:

Respect every person

The road toward operational excellence begins with respecting every individual within the organization. This includes customers, employees, partners, vendors, etc. When people feel respected, they can emotionally invest in their role and give more than just labor. For example, the operational excellence team can exhibit respect by involving employees in the improvement process. Moreover, they may explain to every person how their contribution matters and take feedback for further enhancements.

Pursue perfection in the system

Attaining perfection may seem impossible. But, the pursuit of perfection is the surest way to obtain operational excellence. Otherwise, it may lead to imperfect processes and compromised outcomes. And to seek perfection in the process, creativity and effort from the members and the managers are necessary. Thus, it will help attain par excellence results and meet the required high standards.

Implement scientific thinking

The scientific method involves cycles of assessments and direct observation to form a better process. Embracing systematic thinking means being open to new ideas and applying methodologies to foster a good environment. Moreover, it helps create practical guidelines which are technically proven, thus eliminating the chances of ambiguity amongst members. Besides, it also forms a definite protocol and standardizes the process across the organization, ensuring everyone is on the same page.

Detail-oriented focus on process

Operational excellence is the result of finely tuned processes. However, no matter how smart or dedicated people are, they cannot consistently provide excellent results with inefficient processes. Thus, to solidify the process, the operational team must detect every defect at a granular level and identify ways to course-correct them. Then, they can create a detailed roadmap that will help take a step-by-step approach to improve the existing process and eliminate all the bottlenecks.

Create a consistency of purpose

Operational excellence teams must ensure that each person understands the organization’s mission, its long-term strategic objectives, and their roles in the process. Thus, clarity of purpose helps everyone make better decisions, innovate new ideas, and take calculated risks. It also helps keep employees aware of their roles and responsibilities and avoid unnecessary discrepancies, thus promoting cohesiveness.

Create value for the customer

For every excellence team, the end goal is to make the customers happy and satisfied with the results. It is the customer who decides what constitutes value and what they will pay for. Therefore, the team has to ensure that the established process delivers value and makes a difference. For that, they need to keep all the constraints such as cost, time, and scope in check and ascertain that the quality of the final deliverable is up to the mark.

Methodologies for achieving Operational Excellence

In addition to the principles, the operational excellence team needs to have specific methods to eliminate defects and improve the process.

Here is a rundown of the methodologies that the team may follow:

Lean methodology

Lean methodology focuses on systematically eliminating “waste” in a process. As per this methodology, a business should focus on adding value and removing any bottlenecks in the process. It is the quickest path to success.

The fundamental principles of this methodology are- improving the quality of products, reducing anything that doesn’t add value, and cutting overall costs. It identifies five areas in a process that need to be eliminated while pursuing excellence, these are:

• Overproduction: It happens when resources produce something before it is needed or produce something more than what’s asked. It leads to excessive inventory.
• Waiting: When the process isn’t transparent and resources are left waiting for the next step in the system, it adds no value. Instead, it results in process delays and high costs.
• Transport: Transport is waste caused by the unnecessary movement of incomplete or unfinished products. It is usually caused by poor work standards and can lead to a loss in the product, such as product damages, thefts, etc.
• Over-processing: It happens when excess time is spent on the process than needed. It can result in customer dissatisfaction as the process will get time-consuming and result in delays in deliverables.
• Defects: Defects are mistakes that will need to be fixed, or else the process will have to start over entirely. These defects can be detrimental to the whole process as they can deteriorate the quality, and any defective product will result in client dissatisfaction.

Six Sigma methodology

Six Sigma is a set of tools and techniques designed to improve business processes that will result in a better product or service. This method aims to improve the customer experience by identifying and eliminating any “variation or defect.”

Operational excellence teams can apply the six sigma method and implement a process called DMAIC. It is an acronym that stands for define, measure, analysis, improvement, and control. It helps in reducing the variations and making the system better. Here is a closer look at DMAIC:

• Define: This is the first step. Here, the team will define the problem and begin creating a plan. Additionally, they will start evaluating your available resources through which they can mitigate the process issues.
• Measure: After understanding the problem, the team will measure all the available data and focus on the current process. That way, they can determine the areas of improvement.
• Analysis: After the data is measured and improvement areas are identified, the team will analyze the system’s shortcomings and causes. Following this, they will get to the root of the problem.
• Improvement: In this step, the team has to come up with possible solutions. Then, they can implement these solutions on a small scale to test the results and make any necessary changes.
• Control: This is the last step. Once the team has implemented the new process, they should find a way to maintain that process. To sustain the system, they must ensure that the process stays effective and followed everywhere.

Now that we know the principles and methodologies that the operational excellence team follows let’s understand how to implement operational excellence in your system.

Steps to implement Operational Excellence

Here is a rundown of the steps you can follow to develop operational excellence in your company:

• First, you should create a solid operational excellence team with senior members who have significant years of experience and know the nitty-gritty of the process.
• In the next step, you have to determine the goals and objectives of the project in question. Moreover, you must ensure that every team member understands the expectations.
• Once you have conveyed the objectives and formed the team, you have to analyze the existing business processes and identify areas for improvement. Then, team members can document every significant part of the process and determine what needs to be done.
• After the areas of improvement are identified, the team can formulate strategies and methodologies to eliminate the discrepancies. For example, they can take methods such as the lean methodology or the Six Sigma method to eliminate the defects.
• Lastly, they can assess the tactics’ impact and ascertain the successful strategies to improve the whole process. Following this, they should keep track of the process from time to time and review the system for continuous improvement.

What are the critical success areas for an operational excellence team?

The success of an operational excellence team depends on the results obtained from the improved process. Here is a list of the critical success areas for an operational excellence team:

• Improved customer satisfaction from the end results.
• Reduced operational defects within the improved process.
• Enhanced engagement and productivity from the resources.
• More vital cash control and cash flow within the organization.
• Higher process accountability amongst the team members.

Conclusion

Operational excellence is more of a psychology than a methodology. It helps the team implement process improvement in areas that lack precision, efficiency, and innovation. Whether it’s a small business or a large enterprise, the operational excellence team can change processes and make them better, ultimately attaining the firm’s long-term objectives.

Any organization that achieves operational excellence will have lower costs, higher revenues, less risk, and more satisfied customers. This, in turn, will enable them to maintain the competitive edge.

So, are you convinced to build an operational excellence team yet?

Glossary

SAVIOM Solution

SAVIOM has over 20 years of experience helping multinational clients manage their resources efficiently and effectively. With over 20 years of experience, this Australian-based MNC has a global presence across 50 countries and has helped 100+ clients meet their specific business goals. Saviom also provides tools for project portfolio management, professional service automation, and workforce planning software. So, SAVIOM can help your business to establish an efficient system geared towards your specific business challenges.

A central governance structure is essential to establish a framework for managing various projects. It oversees all different project-related metrics and ascertains that the projects are on track.

PMO plays a vital role in establishing the guidelines for different projects and portfolios. This blog will discuss what resource management practices will help a PMO ensure successful project delivery.

But first, let’s start with the definition.

What is a PMO?

A PMO (project management office) is a group that defines and maintains project management standards, documents project status, and guides an organization. Thus, it ensures effective management of the project metrics and successful delivery. Besides, it helps prioritize projects based on organizational goals, therefore, resulting in higher ROI.

However, in the present business world, the role of a PMO has evolved. It is more than just a hub for administrative functions. A PMO not only maintains project standards but it monitors projects and portfolio progress. It helps the top management to make data-driven decisions.

A modern PMO has the potential to become a value center and improve business profitability. From efficient utilization of the resources to achieving strategic objectives, an advanced PMO can take care of it all.

Three Types of a Project Management Office

There are three types of PMO, they are:

Supportive PMO

A supportive PMO has a consultative role. It has the collection of all projects in an organization. Based on that, it gives on-demand expertise, best practices, templates, training but with a low degree of control.

A supportive PMO works best in an organization where additional project control is not needed. It just works as the learning hub for project managers.

Controlling PMO

Controlling PMO monitors all the project activities. It checks if the project management tools, processes, and standards are judiciously implemented on the projects.

A controlling PMO ensures that the projects are conforming to the goals and objectives of the organization. Therefore, it has a certain degree of control over the projects. If the projects are getting derailed, then it can provide the necessary support to an extent.

Directive PMO

A directive PMO maintains a substantial degree of control in the management of projects. It does not just provide support or has little control over the projects, but it completely takes over the projects. Moreover, it manages every aspect of the project.

It assigns project managers who report back to the PMO. Thus, there is a high level of governance and consistency in the projects.

Best Practices of PMO Resource Management

A PMO is the nerve center of a project-driven company. It must monitor every project metric and ensure that the project remains on track. As resources are an essential investment for any company, one should manage them with utmost diligence. Therefore, the PMO needs to have an efficient resource management structure.

Here are some of the best practices for PMO resource management:

Select the right resource management tool

Often organizations rely on spreadsheets for resource planning. Though they may be beneficial and easy for preliminary scheduling, they become cumbersome and ineffective in the long run. Moreover, in matrix organizations, resources are based in different departments across countries. Silos of spreadsheets and home-grown tools cannot provide a single version of the truth across the enterprise. Therefore, it gets challenging to schedule resources since there is minimum visibility.

A resource management tool helps maintain every resource-related data on a single platform. It provides 360-degree visibility across the organization. It helps evaluate resource availability and also assists in bridging the capacity gap if necessary. As a result, one can allocate the best available resources to the right task at the correct cost. Moreover, managers can find low-cost global resources and ensure successful project delivery without compromising quality.

Prioritize projects based on profitability

For a project-based company, its profitability depends on the success of the projects that it delivers. To achieve that, PMO’s are responsible for prioritizing projects based on the company’s goals, and objectives will generate maximum ROI. To do so, the PMO must:

• Select projects based on business objectives.
• Ensure that the project goals align with the corporate strategies.
• Allocate resources based on project prioritization.
• Track resource utilization for maximum productivity.
• Monitor project progress at every stage to ensure it is on track.
• Evaluate project impact on clients.

Foresee project resource demand in advance

Forecasting project resources beforehand helps avoid last-minute firefighting activities. Thus, it helps eliminate the excess resource cost and ensures that the budget is intact. Long before the project starts, managers can ensure that they have the right resources for the tasks. When resources are not forecasted in advance, it results in suboptimal allocation, which subsequently affects project quality.

A resource forecasting tool provides visibility into the future resource demand based on which managers can forward plan pipeline projects. Moreover, they can also find the resource excesses and shortfalls and take appropriate measures to bridge the capacity gap. For instance, if there is an excess of resources, then project timelines can be brought forward. Similarly, resource shortages can be controlled by providing training or by taking appropriate resourcing measures.

Assess skill set of available resources

The PMO must ascertain that the resources have the right skillset before they are scheduled for the projects. For instance, if an under-skilled resource is allocated to a project, it will cause delays as the resource will require time to acquire the knowledge and level of expertise. Moreover, extra training has to be provided to bring that resource to the optimal level. As a result, it leads to budget and time overruns.

On the other hand, if an over-skilled resource is deployed to the project, it will make the resource feel less valued and eventually blow up the project costs. In addition, it may lead to work-related conflicts or resource attrition. Thus, proper assessment of the resource skill set is necessary for the overall success of the project.

Publish open positions for internal resources to apply

Publishing open positions serves two purposes. Firstly, it empowers resources to select a project of their interest. Secondly, it saves resource managers time and effort to look into the resource pool using many filters. Therefore, when a resource manager selects the ideal pool of resources from the interested candidates, they show greater interest in the project, leading to exemplary results.

A modern resource management solution helps PMOs to publish open positions when necessary. That way, resources can apply for multiple vacancies and, after evaluation, can be allocated to those tasks. It will result in an inclusive culture as resources can work in their area of interest. Moreover, it will also enhance task ownership and productivity.

Optimize resource schedules for better utilization

Under or overutilization of resources has various adverse effects on the delivery of the projects. Both these factors lead to missed deadlines, lower productivity, employee burnouts, and even attritions. Therefore, optimal utilization is necessary to ensure that none of these mishaps happen.

Resource leveling and smoothing are two techniques that managers may take to optimize schedules. For instance, resource leveling means reshuffling the timeline as per the resource schedule. This can only be possible if the client permits elongating the duration. On the other hand, resource smoothing is optimizing the schedule without hampering the period. For example, if a resource is scheduled for 8 hours per day. But he/she can do the work in 6 hours. Thus, the manager can reduce the schedule to 6 hours per day. It will help in ensuring that the resource is used optimally.

Clearly state the roles and responsibilities of resources

A lack of clarity around roles and responsibilities creates confusion among the project team members. When resources don’t have complete knowledge about their roles and responsibilities, it creates unnecessary conflicts. Moreover, it may also result in role overlaps.

The PMO must create a clear role description for every project member. A comprehensible report helps in three ways:

• Firstly, it describes the ideal candidate for the job. This information can be used as a checklist when considering internal hires or seeking external candidates.
• Secondly, they assist the resources to focus on the right areas of the positions. It helps them in understanding what is asked of them. Besides, they realize how their role fits into the bigger picture. That way, they are more productive and better engaged.
• Thirdly, it can also assist the team members in identifying their professional development grounds about the knowledge, skills, and competencies required for their project role.

Conduct training and development programs as required

Providing training and development programs to project team members helps in developing their competencies. In addition, systematic and integrated professional development training provides them with the expertise needed for successful project delivery.

PMO training programs begin with creating performance metrics for better evaluation. A PMO development program helps in getting the best out of every team member. Thus, they can provide the best results when needed. Moreover, it also assists them in making the best use of their slack time. For instance, when resources end up on the bench, their billable utilization gets affected. These programs help the resources to hone their skills and eliminate any professional lackings. Thus, making them better at their jobs.

Develop and manage a resource risk management plan

All projects depend on highly skilled resources to carry out the most critical tasks. But what if any of the essential resources retires from the company or leaves the project midway? Every PMO puts in a lot of effort in creating a formidable project team. However, many do not have a backup plan if a vital resource leaves the organization or remains absent for an extended period.

A PMO must review the staffing levels and develop a resource-risk plan for these situations. Here is a rundown of the ways to create a vital resource risk management plan:

• Determine the critical resource demands in the organization and predict the potential vacant positions.
• Develop a succession plan for critical resources who may retire in the future.
• Ascertain the responsibilities, competencies, and requirements for those positions.
• Evaluate the existing resources or hire new resources if needed.
• Find resources who have the potential to grow into the roles.
• Establish a resource pool of workers who can mitigate the skill gaps.

Build reusable assets and apply them to different projects

Resources get better at their jobs with experience. When the PMO uses a resource for a definite project, it provides a learning opportunity for the resource. It helps in eliminating all the skill gaps and makes the resources more accustomed to the organizational standards. Thus, it assists in increasing their potential.

Thus, when a similar project comes up, PMOs can allocate these resources. As they have previous experience and the right skills, they will be the perfect match for it. Thus, it helps in the successful delivery of the project. Moreover, it assists in avoiding extra resourcing costs, time overruns, etc.

Conclusion

An efficient resource management solution helps maintain the most precious assets of a company, i.e., resources. Following these best practices, a PMO can significantly enhance resource management. It will help in improving resource productivity, utilization, and engagement.

In a nutshell, with the help of these steps, a PMO can:

• Maintain the project management standards.
• Predict resource demands and bridge skill gaps.
• Allocate the right resources to the right tasks at the right time.
• Eliminate resourcing costs significantly.
• Beat market volatility with the proper development programs.
• Deliver projects within the stipulated time and budget.

SAVIOM Solution

SAVIOM has over 20 years of experience helping multinational clients manage their resources efficiently and effectively. With over 20 years of experience, this Australian-based MNC has a global presence across 50 countries and has helped 100+ clients meet their specific business goals. Saviom also provides tools for project portfolio management, professional service automation, and workforce planning software. So, SAVIOM can help your business to establish an efficient system geared towards your specific business challenges.

From the business skeleton standpoint, remote work, as we know, became one of the ways of life. Every industry, from IT to architecture, transitioned to teleworking. This led them to rethink their workflows and policy frameworks. Additionally, if the firms were project-centric, they had to revamp their whole portfolio and project management strategies.

Traditional PMOs based out of collocated offices became a thing of the past. The upheaval demanded virtual central governance.

However, a lot of the firms began questioning the relevance of PMOs – the nerve centers of project-based business.

These turbulent times compelled the CXOs of the firms to make some tough decisions, and this was one of them. But was it correct? Is it valid to dilapidate the central hub of coordination between project managers and stakeholders? Are PMOs really losing relevance in the post-covid world? This article answers all these questions here.

Before we delve into the granularity of the subject, let’s first understand the impact of the COVID-19 crisis on the project management landscape:

How did COVID-19 impact the Project Management landscape?

According to a survey conducted by PMI, 8 out of 10 respondents said that the COVID-19 crisis has had an extreme to a moderate negative impact on business in general.

This can be attributed to the worldwide mandated lockdown. Leaders were grappling with an array of challenges beginning from supply chain disruptions to changing consumer demands. Moreover, the economic downturn led to layoffs and salary cuts.

All these factors led to delays in project delivery. The PMI survey revealed that 29% of project deliveries were severely impacted due to COVID-19.

Constant communication is one of the significant pillars of successful project delivery. However, the enforced remote work culture made this a major challenge for a lot of firms. This is due to the fact a lot of businesses still followed traditional practices of working from collocated spaces.

With the entire workforce being dispersed across global geographical peripheries, it was highly arduous for managers and team members to get real-time updates of the project’s progress, leading to further delays and discrepancies in project completion.

The consumer demands saw a massive shift during the COVID-19 times, which made some projects obsolete. At the same time, the spiraling economy forced some clients to withdraw their projects, leading to heavy business loss to the firms. These scenarios made project managers reformulate their project selection criteria and let go of some of them from the pipeline.

The same PMI survey revealed that covid-19 impacted more than 60% of sponsors’ confidence in the project’s success negatively.

Not to forget, resource management was yet another process that faced the crippling effects of the pandemic. Keeping track of resource KPIs, maintaining their productivity levels, ensuring their engagement and mental well-being from different locations became tedious for managers.

All these challenges escalated the investment in technology and advanced tools to smoothen the transition from physical to virtual work environment. However, this was only possible with some well-defined standard rules and policies, and the PMOs were responsible for defining these for project-based organizations.

Let’s see how PMOs facilitated the firms to deal with these grim circumstances,

The role of PMO in dealing with unprecedented crisis

A modern-day PMO serves more than just being an administrative center. It can potentially become a value-driven profit center. It can regulate resource management strategies, maximize profitability, and meet the strategic objectives while also looking after the admin work.

Here is a run-down of PMO’s roles and responsibilities that helped organizations deal with the COVID-19 crisis,

The central hub to form standardized rules and contingency plan

The pandemic put forth an array of uncertainties and risks in terms of economic crisis, unplanned leaves, and more. The PMO of the organizations carefully assessed each risk and formulated a new contingency plan to navigate through the uncharted territory. Additionally, they negotiated with the stakeholders to either make the deadlines flexible or hold the request for a stipulated time.

As we know, a firm deals with multiple projects simultaneously, and it requires a standard framework to ensure efficiency and uniformity in processes. To ascertain that all project managers follow standard protocols, PMOs also acted as a bridge between them and developed a new set of policies for the remote project and team management.

Prioritizing projects in alignment with the current situation

As discussed earlier, the worldwide recessions and a colossal shift in consumer demand brought a plethora of projects to a grinding halt. These volatile demands also propelled firms to alter their long-term strategic goals. PMOs are majorly responsible for aligning the projects with the company’s goals and objectives. This is why they reprioritized their project pipeline in alignment with the current situation.

A classic example is a shift from physical retail stores to e-commerce platforms. The entire FMCG industry formed its web portal to stay afloat amid the lockdown. Moreover, luxury clothing brands shifted their focus to manufacturing essential safety gear to expedite their sales.

Implementing the technology infrastructure for a smooth transition

Remote work would have been impossible without the advanced technology and tools. However, not every tool or software can help your firm sail through the challenges smoothly. Thus, the decision-makers must assess and evaluate every tool or software you plan to invest in.

The onus lay on PMOs to understand the team and managers’ needs and accordingly select the tool repository. After all, these tools would be the enablers going forward. Thus, the PMOs implemented the right technology infrastructure to facilitate a hassle-free transition from physical to remote work.

Managing and regulating the organizational resource pool

The pandemic did not just affect businesses; it affected humankind as a whole. Employees were in constant stress due to an unimaginable increase in the number of cases, and the growing uncertainties added on to it. Thus, it was of prime importance to keep their mental and physical well-being in check while getting the work done.

The PMOs took charge and ascertained that every resource is at its productive best while giving enough room to cope with the crisis. At the same time, they constantly coordinated with resource and project managers to ensure that every resource is allocated to the right job and each one has enough work on their plate. This, in turn, led to the successful completion of projects within time and budget, even during times like these.

Training the project managers to combat the unforeseen events

No one saw this situation coming, and every contingency plan or risk management framework was just a trial and error. The situation demanded a leader who could stay strong and level-headed to steer his/her team to reach the other side unscathed. PMOs were these leaders for project managers. They were responsible for helping them tackle the unforeseen events head-on.

Some PMOs organized dedicated remote training sessions for project managers to give them a direction as to how to manage projects and resources. Financial regulation of these projects was the topmost priority given the crunch. Thus, along with serving this message, PMOs also conveyed the altered goals with regards to the evolving demands and formed guidelines for efficient workforce management.

These scenarios are evident enough to exhibit a PMO’s significance in project-led businesses. And were these challenges tackled from a physical workspace? Not at all. A traditional PMO transitioned to a virtual set-up altogether in need of the hour.

The need for a PMO- now more than ever

The NHS Nightingale Hospital in London, UK, took external help to set up central governance to cater to the surge in demand for hospital capacity. After integrating diverse organizations and forming solid coordination between their activities, the hospital witnessed miraculous results.

The PMO established a shared data environment for collaboration, information management, communication, and document control, which led to staffing the right personnel for the right tasks. They enabled different project leaders to collaborate and learn from each other by setting up three calls a week.

All these initiatives led to a smooth transition and well-regulated management of the hospital. This case study mentioned above shows the roles that PMO played in times of crisis and how the need for PMO has become more prominent during turbulent times.

In fact, according to a Gartner survey, 70% of organizations that implemented a PMO reported an improvement in project success rates.

Now that the importance of having a dedicated PMO is established let’s look at how the post-covid PMOs will look like,

Digital PMOs- The new normal in the remote work environment

Remote work is here to stay. Another recent Gartner CFO survey revealed that over two-thirds (74%) plan to permanently shift employees to remote work after the Covid-19 crisis ends.

This implies that physical PMOs are bygones, and the digital or virtual PMOs will take over in the post-covid world. These virtual PMOs will supervise every aspect, starting from project selection and controlling the project’s lifecycle to maximizing utilization of the workforce.

To catalyze these processes, the PMOs will be supported by a solid technological tools inventory. It would comprise major software like project portfolio management, resource management, collaboration tools, and more.

The question is, will this benefit in the long run?

The digital PMOs will run on unified platforms that will help the firms maintain a single version of the truth. This will enhance the transparency across the enterprise and stakeholders by many folds. As a result, decisions will become more data-driven, and the overall organizational efficiency will see a steep rise.

In a nutshell, like every cloud has a silver lining, so does this crisis, leading to a more transparent, open governance format.

Talking about software, a resource management solution can become a major game-changer for virtual PMOs. Here’s how,

How can a resource management solution be a game-changer in digital PMO?

Resources or the talent pool of the organization drive the projects to success. Thus, PMOs must always strive to keep their productivity and performance at their best. To do so, tapping into the right potential is extremely necessary.

However, how can a PMO manage a vast expanse of resource pools dispersed across boundaries?

This is where a resource management solution comes into the picture. It can provide a plethora of benefits to PMOs. Here’s the list:

• Unmatched enterprise-wide visibility

Using the solution, PMOs, project managers, and resource managers will get 360-degree real-time visibility of the resources, profiles, and schedules.

• Foresight into pipeline project demand

The resource management tool will foresee the project demand that will allow managers to form a resource plan ahead of the curve. Resource managers will have enough leeway to implement the right resourcing treatments to create an appropriate resource mix.

• Real-time insight into resource metrics

To assess the resource performance on a timely basis, the PMOs and the higher-ups will get real-time reports about resource utilization (billable, non-billable, and strategic), availability, planned vs. actual metrics, and so on. They can leverage these reports to take remedial actions in advance.

• A systematic resource requisition workflow

Resource requisition is a critical step in project management. Using the tool, project managers will be able to raise a request in time, and resource managers will fill them based on project criticality rather than a first-come, first-serve basis. Moreover, the tool maintains an audit trail for all concerned authorities that will minimize internal conflicts.

• Beat market volatility with accurate foresight

Resource management software provides substantial insights into future skillsets and project demand. A PMO and resource manager can gauge the existing skills gap and organize internal training to upskill the employees. This will allow PMOs to futureproof the workforce and accomplish more diverse projects with fewer resources.

Subject to these benefits, resource management software will become an incumbent part of a successful PMO.

In conclusion, is a final verdict of the impact of PMO during COVID and whether it will be relevant in the post-covid era.

Final Verdict- What does the future of PMO look like?

A PMO is the cornerstone of the successful execution of projects. It is the vital link between the project managers and resource managers, project managers and stakeholders, etc. For example, a PMO acted as the resilient bridge during the pandemic that facilitated the project managers and team members to switch to the remote work environment hassle-free.

So, the PMO’s relevance in the post-covid era is out of the question. However, as change is the only constant, the PMOs will see a massive transformation in terms of their structure and strategy. They will go digital, and the decision-makers will be running the office from across geographical peripheries. The strategy to select and manage the projects will be reinvented, and technological advancements will form an integral part of the PMO’s assets.

PMOs will, in fact, become all the more critical in the post-covid era to ensure the smooth functioning of the remote teams.

What do you think? Will PMOs become obsolete, or will digital PMOs take over?

Glossary

Saviom Solution

SAVIOM is the market leader in providing an Enterprise Project Resource Management solution. With over 20 years of experience leading the market, Saviom is actively used by over 15 highly-esteemed global companies worldwide. The tools within the suite include project portfolio management, professional service automation, and workforce planning software. It also entails supporting solutions to schedule equipment and assets seamlessly. Re-engineer your project management efficiency with a system shaped around your business!

However, it’s not feasible to do so without a central governance structure. This is when a Project Management Office (PMO) comes into the picture.

A PMO is the nerve-center of an organization that propels the projects to the finish line within time and budget. With a solid framework in place, PMO takes care of all the nitty-gritty pertaining to the projects.

Naturally, this task presents umpteen challenges before the successful execution of the deliverables takes place. The challenges or roadblocks can be in the form of the inability to form an organized workflow, communication gaps between different managerial bodies, etc. One of the most prominent challenges that can surface and impact the project catastrophically is resource management.

In fact, according to the recent Center for Business Practices (CBP) research, “Resource management challenges are the top issues faced in project management today.”

This article emphasizes all the potential bottlenecks that come through a PMO’s way while managing resources.

But before we delve into the details, let’s have a glimpse of other challenges PMO encounters,

The challenges faced by PMO

Setting up a PMO demands significant investment, due to which many firms and decision-makers are skeptical. So the foremost challenge project managers face is getting the executive buy-in. Convincing the stakeholders to form a definitive body that can serve as a value center in the long haul is daunting.

The next hurdle in their way comes in the form of program and project prioritization. When you are just taking the initial steps, every project seems feasible to execute. Of course, that’s not the case. This only happens because of a missing project selection criterion in place.

For instance, you have two projects in the pipeline, one that offers significant ROI and another that is not high in revenue but adds value and other intangible benefits. Now, given a choice, every manager will have a different perspective and prioritize accordingly. This may, however, create chaos as the decision is based on intuition and personal experience rather than exact numbers.

A PMO can overcome this challenge by developing an organized framework to select the project. A classic example is integrating a cost-benefit analysis to make a decision based on facts and figures. Once this is tackled, the next stage is project planning and execution based on priority. This is when the managers face an ordeal in finding the right resource, forming realistic schedules, etc.

The question is, why is project resource management given so much weightage in deciding the PMO’s success?

The importance of resource management in PMO

A PMO is a focal point that is responsible for every project and its successful delivery. It handles the execution of multiple projects at once. Let’s take an example; three independent digital marketing projects are going on in your firm. All of these projects demand a senior data analyst.

However, you only have one data analyst whose schedule is thinly stretched and is unavailable to take up the job. What would you do? If you keep all the projects going in parallel, you end up burning out the employee, or if you prioritize only one project, the others will come to a halt. Only if you had taken a systematic approach and foreseen this could you take charge of the situation with diligent planning in advance.

This proactive planning ensures every project runs smoothly and has the right talent while keeping the resources’ health in check. That’s what makes resource management an incumbent process of a value-centric PMO. If not done efficiently, it can have severe repercussions on the project’s overall health.

Here is the list of consequences you might encounter,

How does poor resource management impact the project’s progress?

What is poor resource management? The inability to meet the project resource demand before its onset, suboptimal utilization of the workforce, inadequacy in allocation, and scheduling are amongst many other practices that constitute poor resource management.

All this cumulatively influences the project’s course and strategic vision in the long run. For instance, assigning a less experienced resource to a critical task will delay the timeline. Similarly, if you allocate multiple projects to one highly specialized employee, he/she might juggle between the deadlines, which will eventually lower productivity. This scenario will also result in a declined project’s performance and quality.

Only if the project’s resource demand was taken care of during the planning stage and the workforce’s schedule and roles were analyzed meticulously could this be avoided. This is how inefficiency in managing resources can create havoc in project management.

It’s now time to take a deep dive into resource-centric challenges,

What are the resource management challenges PMO encounters?

Most of the resource management challenges stem from not having dedicated software in place. Organizations are expanding their horizons and dispersing across geographical boundaries, and employees from different locations cohesively work on one project.

Of course, it’s not feasible for a manager to keep a tab on every resource and their performance manually when separated by distance and time zones. A tool can solve these issues, but the firms who don’t implement the tool or sometimes don’t use it the right way face many hurdles.

Here is the list,

Lack of visibility into project resource demand

The PMO’s primary responsibility is to ascertain that every project is executed with due diligence and the quality is at par to meet the client’s expectations. To do that, one must know what skillset and how many resources are required in advance. Otherwise, last-minute firefighting can lead to wrongful hiring and affect the project’s quality and output.

However, PMOs often lack clarity on the project resource demand, leading to eleventh-hour hurdles and further delays. The previous example of digital marketing projects needing the same resource at the same time and managers were in the dark until the last hour is a prime example of this predicament.

Sub-optimal resource allocation due to siloed data

The most crucial step in project planning is allocating the right resource to the right task.

But, as mentioned earlier, the PMOs that don’t invest in an intuitive solution rely on cumbersome spreadsheets to maintain the resource-data repository.

The drawback of these traditional tools is that they don’t update data in real-time. So managers won’t know who is available or who is booked on another task. In fact, this might even lead to double-bookings causing overallocation of work. Thus, sub-optimal allocation due to the absence of centralized data inventory is a real challenge for PMOs.

Inadequate resource utilization because of poor prioritization

Supposedly, you have four projects in the pipeline and have to fulfill the resource demand accordingly. One project aligns with your strategic goal and brings ROI, another does not offer tangible benefits but adds value, one does not add value, and one’s resource demand is not aligned with your talent pool’s expertise. Naturally, the priority should be the one that is strategically aligned and brings ROI.

But, due to a missing framework to select the projects, you prioritize the one you see first, i.e., the one which is not beneficial at all and end up scheduling the resources. In this case, neither the firm is benefitted from the project nor are the resource’s skills utilized in the right place. Thus, a substandard system to precede projects leads to inadequate resource utilization.

Unorganized resource requisition workflow

A resource manager receives countless resource requests in a day from project managers. They often fulfill the request on a ‘first come, first serve basis’ instead of completing the demand for the high-priority projects. This happens when PMO does not follow an organized resource requisition workflow.

This can even lead to internal conflicts and ego clashes between two managers. Moreover, the projects that require immediate attention are sidetracked, and the ones that are not time-sensitive and could be prolonged are executed first. An absence of this workflow can impact the bottom line negatively.

Inability to future-proof the workforce against evolving demands

The current market is evolving as we breathe. The prominence of novel technology and business trends demands innovation and out-of-the-box expertise. The onus is on managers to stay ahead of the curve and stay abreast with the upcoming innovations and skillset. It will allow their existing workforce to be future-ready with technology trends.

For instance, you have hired two software engineers who master java-based coding. But the current market demands someone fluent in R and Python. Since you didn’t foresee this, your resources would become a liability, and eventually, you will have to get rid of them. If you had foresight into the future market opportunities and demands, you could train or upskill the same talent. This inability to future-proof the existing workforce can lead to unplanned attrition, increased overhead costs, benched resources, and so on.

Lowered productivity due to lack of insight into various metrics

Imagine you are managing a project only to realize towards the end that the cost has exceeded the budget and the timeline is delayed. What would be your first thought? Naturally, if you had seen this coming, you would have taken the right action in time. The fact is managers can stay updated in real-time about any resource metric starting from availability to utilization using the tool to control the project lifecycle.

Those who do not invest in this solution fail to get these instant updates that compromise quality and cause delays. For example, you schedule a resource for a specific task. But, you are unaware that he/she is booked already, which implies you overallocated him/her. Since the resource’s schedule is stretched thinly, he/she will be unproductive and eventually burned out due to longer working hours and so on.

Ineffective bench management without accurate forecasting

An ideal PMO aims to significantly minimize the bench time to ensure their human capital generates enough revenue or adds value rather than idling. To achieve this, one must stay ahead of the schedules and know which resource is likely to end up on the bench.

However, many PMOs still struggle to get accurate predictions and rely on mere guesstimations. This is because they don’t have an advanced forecasting solution in place.

Due to inaccurate predictions or lack of foresight into bench reports, some employees end up spending more time than stipulated on the bench. It eats up from the firm’s revenue and wastes resources’ valuable skills and time.

These are some of the challenges a PMO faces, which can negatively impact the projects’ health and even defeat the purpose of a value-centric PMO.

To minimize this catastrophe, managers must implement the right resource management software and follow the best practices to achieve exceptional results.

In conclusion, here are some tips and tricks to overcome these hurdles,

Takeaway tips to combat these challenges

• Select the right resource management solution to suit your business needs and get accurate real-time reports of the necessary metrics.
• Optimize resource schedules using techniques like smoothing and leveling at the project planning stage. It will avoid future discrepancies, minimize risks of burnout, and escalate productivity.
• Foresee the project resource demand and promote proactive resource planning to bridge the capacity vs. demand gap in advance. This will minimize your hiring costs and help you get the best talent for the job.
• Stay ahead of the curve and conduct professional development programs to future-ready your workforce and stay relevant in the long haul. It also increases the sustainability of your firm and helps you maintain a competitive edge.
• In addition to these, state the roles and responsibilities of every employee with utmost transparency. This allows them to know what is expected of them and how they can add value to achieving the firm’s long-term objectives.
• Publish open positions to form an inclusive culture that gives employees a chance to work on their area of interest. This will enhance task ownership and productivity by multiple folds and organizational efficiency at the same time.

How has your PMO’s journey been so far?

The Glossary

The SAVIOM Solution

SAVIOM is the market leader in providing an Enterprise Resource Capacity Planning solution. With over 20 years of experience leading the market, Saviom is actively used by over 15 highly-esteemed global companies worldwide. The tools within the suite include project portfolio management, professional service automation, and workforce planning software. It also entails supporting solutions to schedule equipment and assets seamlessly. Re-engineer operational efficiency with a system shaped around your business!

They didn’t know it at the time, but these hubs were the precursors to the modern-day PMO. The name first came into existence in the 1930s and was coined by the US Air Corps during the development of Boeing P-26 Peashooter and Martin B-10 bomber simultaneously. The concept of PMO  was adopted by IT, construction, and other private sectors propelled by the widespread use of computer technology. Since then, it continued to be a staple for large organizations handling multiple projects across departments.

During the unprecedented times of market volatility and digital disruption, businesses need the right hands on deck to sustain business maturity. And the PMO could be just the ticket to accomplish this. Unconvinced? The Pulse of the Profession 2018 survey conducted on 4,455 project management practitioners revealed that more than 80% of champion organizations have a PMO. 

1.What is PMO?

A Project Management Office is a centralized function that ensures that projects are executed in a standardized manner by stimulating project delivery mechanisms in a controlled way. At the grassroots level, it assists the project management teams and various stakeholders who make critical decisions about funding, prioritization, and resourcing. In short, PMO’s are set up to assist project managers in successfully achieving business objectives. From acting as an enterprise portfolio management office (EPMO) to partaking in management-level reporting it does it all. 

Yet, PMO’s are underplayed by most organizations due to the conflicting interests of stakeholders and the constant pressure meted out to justify its serviceability in both the short and long term. Despite the significant responsibilities of a PMO, setting up one has been debatable on the grounds of perceiving it as an unnecessary dent on investment and efforts because it pulls resources who already have a lot on their plate. On the contrary, with buy-in, investing in a PMO could be the best decision you’ve ever taken to revitalize organizational maturity. 

2.Why do you need a PMO?

Quite simply because we do better when we know what we’re up against. 

Businesses are often plagued with limited project reporting, inconsistent methodology, inefficient resource management, lack of accountability, and budget and time overruns. These reasons are tangible enough to invest in a PMO. Besides, bringing about a structure to your business roadmap will enable the seasoned key stakeholders on board the PMO to have sufficient experience dealing with challenges like the ones mentioned above. So, whether your project team handles fewer projects but is still pressed with communication and resource allocation challenges, or you have 5 project managers handling 4 complex projects across various departments, a PMO shall be indispensable to both. Organizations can achieve the following benefits using a PMO:

1. Portfolio management: 

PMOs today has shifted from being operational in a standardized way to a more comprehensive portfolio management structure that is more result-driven while keeping focussed on the project priorities. An organization may have a collection of project portfolios across various departments. It may be a portfolio of technology, finance, quality control or other function-specific projects

Portfolio Management within a PMO is a performance-oriented approach that evaluates the financial and operational KPIs to achieve strategic goals by evaluating, selecting, assessing, managing projects, and aligning them with organization objectives. 

Project portfolio management provides an organization-wide perspective and insight into the overall health of ongoing projects, enterprise-wide resource capacity/availability, and supports decision-making processes on project investments. 

2. Align corporate strategies: 

Complex operating environments and global competition have compelled C level executives to use PMOs for ensuring all activities align with the strategic vision of the business. Initially a PMO was created to meet project-specific requirements and did not have a direct connection with high-level business objectives. Today, PMO’s direct connection with the success of the overall business performance is a yardstick for measuring business efficiency.

The Pulse of the Profession 2018 report reveals 72% of high performing organizations have a strong alignment of EPMO with the business strategy.  The same study revealed that a balanced scorecard consisting of strategic objectives, indicators, and initiatives will help eliminate the disconnect between strategy and project execution. Alignment between corporate strategies and project, program, and portfolio management helps achieve business objectives. 

3. Improve benefit realization: 

Complexities like increased use of virtual teams, higher stakeholder expectations, and rapid digital transformation have compelled project managers to shift towards higher business efficiency to achieve strategic goals and objectives. To achieve that, businesses should focus on the practices that identify benefits, align them with business strategy, and track their progress throughout the project lifecycle. 

Benefit realization focuses on identifying, planning, monitoring, and tracking of benefits of a project and ensuring that once attained, they are transitioned to an ongoing process for sustainability.  When you set up a PMO you have a fresh objective to help you set realistic, and strategic goals that ensure no project in the portfolio runs afoul of quality assurance.  A PMO helps in achieving strategic goals and justifies ongoing expenditures and investment in project management maturity initiatives. When PMOs continuously manage resource requirements proactively, it is easy to trace how, when, and why a particular resource pool delivers business benefits. 

4. Governance and accountability: 

One of the primary roles of PMO is to engage the right stakeholders and define their functions, responsibilities, and authorities within the environment. And as it matures, its roles and responsibilities also alter in tandem with business demands and capabilities. The PMO Governance Framework defines the PMO authority and assistance it requires to boost project management capabilities within the business. 

It standardizes the project-related governance processes by ensuring that decisions are taken by the right people, based on the right information. The governance role of PMO  also includes peer reviews, audits, devising project framework, and ensuring accountability at all levels. Good project governance can avert risks of ambiguity, pecuniary, or regulatory issues, losing sight of objectives and responsibilities of stakeholders.

5. Enhanced transparency: 

Being a centralized source of project information,, a PMO is responsible for providing relevant information for effective decision-making in a simplified easy to comprehend manner. Business intelligence reports, in-depth status reports, meaningful dashboard reports generated by a PMO makes it a critical source of input for executive decision making. 

It serves as the independent “eyes and ears” of management and provides them early warnings of problems so that corrective actions can be taken ahead of time. Additionally, a PMO communicates to the stakeholders and project management team about successes and failures encountered during project implementation and informs them of ongoing project management activities. 

6. Foster Knowledge Management: 

 Studies have shown that implementing tools and techniques is not enough to guarantee project management success. A PMO is the kernel of enterprise knowledge management which means project teams can stop reinventing the wheel and make it the focal inventory for lessons learned, templates, and best practice. A PMO is the central hub of a project management network and has the opportunity to access the eclectic mix of knowledge sources from various projects. By scheduling meetups where practitioners with common interests can meet and share best practices, PMO ensures that employees at all levels participate in the concept of knowledge sharing and continue to do so. 

Knowledge management improves the efficiency of an organization’s decision-making ability by developing, sharing, utilizing, and managing the overall expertise and knowledge of an organization.

When you set up a single KM repository for use in orientation and training sessions, people realize the benefits of having a single format. Knowledge management should become an integral part of every project professional where knowledge assets are efficiently shared and transferred intentionally in a systematic manner.

7. Forges future-focused culture: 

According to Pulse 2020 statistics, business leaders voted organizational agility (35 %), investing in the right technologies (32 %) and securing relevant skills (31 %) as key factors for future-fit organizations. Additionally, organizational agility, artificial intelligence, and machine learning also created the urgency for project professionals to manage a portfolio of projects that are backed by technology. 

In the same survey, approximately 53% of executive leaders have prioritized building a culture that is receptive to change. A PMO is responsible for training and expanding the skillsets of project professionals on leadership, technical, business, and digital predominantly. They are agile enough to adapt when strategy shifts. An agile PMO should be flexible and help focus on being framework-driven with a process that boosts operational efficiency, helps to gain actual rather than perceived value, and achieve estimation accuracy. 

The takeaway 

A well-accepted PMO will leverage efficiency, effectiveness, and productivity while minimizing the organization’s exposure to risks associated with project failures.  Therefore, investment in a robust PMO should not be regarded as a luxury, but a necessity for continuous improvement and organizational maturity. However, for a PMO to successfully deliver value, emphasis on people skills, leadership, motivation, and trust-building is indispensable. These are prerequisites for the PMO to be perceived as a trusted partner to all project managers and stakeholders in particular.