An Oracle White Paper April 2009

Does your Organization Need a Project Management Office?

Improving project success rates with a PMO

Does Your Organization Need a Project Management Office?: Improving project success rates with a PMO

Introduction
No project plans to fail. Yet 19% of all projects still do and another 46% of projects face significant challenges, such as delays, budget overruns, or end products with less than the required features and functions, according to research from the Standish Group1. These failures and challenges can be attributed to undocumented project management methods, uncontrolled and reactive delivery, unrealistic budget or time expectations, limited planning, or a lack of executive commitment. As the number of projects grow within an organization, so does the risk of failure as resources get stretched and oversight lags. It becomes increasingly important to define project management processes and develop metrics and best practices for keeping projects on time and within budget. For many companies, that means creating a Project Management Office. (PMO). When implemented properly, an effective PMO strikes a balance between the tactical and strategic. It fluidly manages the entire portfolio of projects and skillfully controls internal assets to maximize their impact. The PMO continuously ensures that enterprise assets and resources are strategically aligned with business goals. The Stimulus Plan Makes Waves Today, project management efficiencies are more important than ever. The $787 billion economic stimulus plan is expected to create a wave of new projects related to transportation, energy, communication, technology and healthcare to name a few. Companies with finely tuned project management processes in place stand the best chance of allocating the best resources to projects and meeting their objectives on time and within budget.

Does Your Organization Need a Project Management Office?: Improving project success rates with a PMO

The same promise holds true in global markets. At least 34 countries have developed similar stimulus plans totaling $2.25 trillion, according to reports3. Many stimulus plans are oriented toward spending on roads and other transportation projects, such as Chinas plans to build or renovate airports, subways, and railroads. Others are providing tax cuts for consumers and businesses, as is the case in Canada and Brazil. Russia is trying to restructure the massive debt hanging over its corporations. Some countries, such as France, are aiming the stimulus at key industries, including Airbus, the giant aerospace manufacturer. The combination of new projects and an influx of resources create the perfect storm for project management inefficiencies. A project management office can streamline efficiencies and position the company for future project successes. This brief introduction white paper, Part 1 of Oracle Primaveras PMO Whitepaper Series, discusses guidelines and benefits of building a PMO to improve project success.

Does Your Organization Need a Project Management Office?: Improving project success rates with a PMO

You Know You Need A PMO When

Companies should develop a project management office when these challenges reoccur: The scope of projects continually changes during its lifecycle. One group of resources manages multiple projects at the same time. The size and scope of projects requires the company to employ many outside contractors or vendors. Project leaders must present consolidated reports and metrics representing all projects. Clients and management require clear communication from one source. When projects repeatedly finish later than planned or over budget. When projects require resources from different geographic locations.

Building a Project Management Office

A project management office2 is a staff function that builds, maintains, and improves the project management policies and procedures in the organization. It supports project managers and their teams in the effective application of sound project management principles and techniques to achieve project success. In some cases, the PMO actually manages projects, including the unilateral development of project plans and the direct control of performance. Some PMOs even perform tasks in projects that are normally the responsibility of other functional groups, such as procurement, quality assurance, legal, or human resources departments. The PMO can also conduct financial or cost/benefit analyses to determine what projects should be undertaken.

Does Your Organization Need a Project Management Office?: Improving project success rates with a PMO

Regardless of their scope of services, each PMO has a type of work in common: the project. A project office generally does not address work requests, or usually projects below a certain risk or cost threshold (for example, $100,000 to $500,000 budgeted projects). Still, the basic unit a project office deals with is the project defined as having a discrete beginning and end, and a unique deliverable.

Bottom line: A project management office ensures that projects succeed every time.

To learn more about what type of PMO is right for your organization and best practices for success, please view Part 2 of our PMO Whitepaper series, Project Management Office Best Practices: A step by step plan to build and improve your PMO.

SOURCES: 1. Chaos Summary 2008, The Standish Group 2. http://www.pmforum.org/library/tips/2008/PDFs/Clark-7-08.pdf 3. Global Stimulus Plans: http://features.csmonitor.com/economyrebuild/2009/02/04/economic-stimulusplans-now-global-phenomenon/

Does Your Organization Need A Project Management Office? April 2009 Oracle Corporation World Headquarters 500 Oracle Parkway Redwood Shores, CA 94065 U.S.A. Worldwide Inquiries: Phone: +1.650.506.7000 Fax: +1.650.506.7200 oracle.com 0101 Copyright 2009, Oracle and/or its affiliates. All rights reserved. This document is provided for information purposes only and the contents hereof are subject to change without notice. This document is not warranted to be error-free, nor subject to any other warranties or conditions, whether expressed orally or implied in law, including implied warranties and conditions of merchantability or fitness for a particular purpose. We specifically disclaim any liability with respect to this document and no contractual obligations are formed either directly or indirectly by this document. This document may not be reproduced or transmitted in any form or by any means, electronic or mechanical, for any purpose, without our prior written permission.

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