CIO Key Findings From The Anatomy of A World Class PMO

INFORMATION TECHNOLOGY PRACTICE
PMO EXECUTIVE COUNCIL
Key Findings from

the Anatomy of a
World-Class PMO
© 2011 The Corporate Executive Board Company. All Rights Reserved.

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Executive Directors
Shvetank Shah Kristin Sherwood Production Designer
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Contributing Designers
Jaime Capella Ian Watson
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www.executiveboard.com Practice Manager Quantitative and Financial Shweta Sharma
John Roe Analysis Group
Editor
Senior Director Managing Director Kaira Casey
Miles Gibson Kavitha Venkita
Project Manager Benchmarking Research

Kabeh Vaziri Team
Neha Bindal
Consultant Joydip Bose
Humaira Arifin Papia Debroy
Analyst Dhruva Ghosh
Akshet Sachdev Jen Grossman
Disha Luthra
Executive Advisors
Marina Murray
Bill Lee
Lindsay Mutimer
Tim Macintyre
Scott Pedowitz
Nathaniel Novosel
Rumki Saha
Dorota Pietruszewska
Carsten Schmidt
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PMOEC1054611SYN
TABLE OF CONTENTS
EXECUTIVE SUMMARY • 1
Introduction • 7
Developing the Anatomy of a World-Class PMO • 8
Benchmark Demographics • 9
Key FINDINGS • 11
Importance of PMO Activities • 12
Maturity of PMO Activities • 13
EPMO and PMO Relative Strengths • 14
Impact of Tenure • 15
Agreement on What Is Important • 16
Key Takeaways • 19
Detailed Findings • 21
Distribution of Responses • 22
Differences in Priorities Across PMOs • 24
Differences in Maturity Across PMOs • 25
Recommended Resources • 27
Appendix • 33
PMO Maturity Framework • 34
Maturity Levels • 35
Benchmarking by Revenue Band • 47
Benchmarking by Industry • 49
The Attribute Priority Index • 51
PMOEC1054611SYN
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PMO Executive Council

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Executive Key Detailed Recommended

Introduction Appendix
Summary Findings Findings Resources

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PMOEC1054611SYN
1
Key Findings from the Anatomy of a World-Class PMO 2
EXECUTIVE SUMMARY
The Anatomy of a World-Class PMO measures the importance and ■■ Members disagree on the importance of vendor management.
effectiveness of 23 competencies common to highly effective project Vendor management is a low priority on average but is emerging in
management organizations. The anatomy defines capability levels based importance for a few leading organizations.
on the practical experiences of these organizations.
■■ PMOs are struggling to communicate their value proposition.
Our analysis of the anatomy data yielded the following key findings: While members recognize the need to demonstrate the value of
the PMO, they face a significant maturity gap in this area.
■■ Project stakeholder management is the greatest development opportunity
across organizations. However, compared to PMOs, EPMOs have stronger ■■ Program and project delivery is a top priority.
stakeholder management capabilities at the executive level, and this Rising stakeholder expectations have led to a renewed focus on
capability seems to be filtering down to the rank-and-file project managers, program and project delivery even though it is a core strength for
as well. PMOs recognize this weakness and are focusing their efforts in this most PMOs.
area.
■■ Investment in staff development does not reflect the importance
■■ Overall maturity in most PMOs stagnates for many years. Although PMOs of desired skill levels. PMOs consider project manager skills a high-
make quick gains in overall maturity during the first two years, most seem value capability, yet they are not dedicating enough mind share to
to “squeeze the balloon” for many years; they prioritize some activities at developing staff.
the expense of others, never raising the overall maturity of their function.
However, they seem to stabilize after 10 years and are able to increase
maturity across activities simultaneously.
■■ PMO budget is positively correlated with maturity, but the number of

employees is not. The diverging correlations suggest that PMOs may be
getting a boost from hiring fewer, but more talented and highly paid staff.

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PMOEC1054611SYN Summary Findings Findings Resources
Core PMO1 Capabilities and Characteristics
GoVERnAnCE STAKEholdER MAnAGEMEnT
Clarity of pMo Mandate perception of pMo pMo Autonomy pMo performance project-level Stakeholder pMo-level Stakeholder Vendor Management project portfolio Metrics
and Expectations Value proposition Measurement Management Management Collection and Reporting
Ability to clearly articulate level of understanding and Degrees of freedom Ability to measure Consistency and Consistency and Extent to which the PMO Extent to which the PMO
the PMO’s mission, acceptance of the PMO’s given to the PMO to set and demonstrate PMO effectiveness in approach effectiveness of the supports vendor selection can provide a holistic
responsibilities, and value proposition governance dimensions performance and impact to managing relationships PMO leadership’s efforts and management activities value-based view of project
objectives within its own organization on business outcomes year over the project/program to engage its various portfolio health
over year lifecycle constituencies
project Manager
Skills and outlook
Extent to which project
managers demonstrate a
business-outcomes focus
and are viewed by project
sponsors as partners rather
than mere task masters
organizational Change project Manager

Management hiring practices
Ability to manage projects Degree to which project
such that they do not manager hiring and
STAFF And lEAdERShIp dEVElopMEnT

result in overwhelming
The Anatomy of a World-Class PMO measures the selection practices assess
poRTFolIo pRIoRITIzATIon And RESoURCE plAnnInG
organizational change for proficiency in critical

end users importance and maturity of 23 key attributes common thinking and general
management skills
project Effort Estimation

to highly effective PMOs and EPMOs. The anatomy project Manager
Rigor and Efficiency
defines capability levels based on the practical performance Evaluation
and Incentives
Consistency and accuracy
of project effort estimation experiences of project management organizations. Extent to which project
manager performance
evaluations focus on
business outcomes
attainment
Resource Availability project Managers’ Critical

and Allocation Skills development
Ability of PMO’s capacity Extent to which PMs’ skills
planning and resource development approach centers
utilization tracking efforts to on developing leadership,
anticipate and prevent staff relationship building, and
resource bottlenecks for general management skills and
funded projects business knowledge
portfolio prioritization Managing project Risk Management Benefits Realization Business decision-Making Adaptability of project project Management project Manager
Financials Efficiency Management Methodology Best practice Sharing Career path
Degree to which PMO is Degree of rigor applied Ability to comprehensively Extent to which project Ability to focus business Degree of flexibility PMO’s ability to foster Extent to which PM career
able to effectively move to projecting project cost identify and compare risks management approach partner involvement on the built into standard learning in the project paths are clearly defined
resources and funds to implications over the full across the project portfolio focuses on delivering most critical project and project management management community and aligned to general
highest value projects lifecycle, including post- business outcomes portfolio trade-off decisions methodologies management career paths
midstream rollout
pRoGRAM And pRojECT dElIVERY
1 “PMOs” refers to both EPMOs and PMOs, except where the two types of organizations are compared in the document.

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Executive Summary 3
PMO executives and key

direct reports rated the
RELATIVE IMPORTANCE AND MATURITY OF DIAGNOSTIC
importance and maturity
of 23 activities within
ATTRIBUTE Categories
five broad attribute
categories.
Importance Maturity Gap
■■ An analysis of more than ■■ While the mechanics of delivering
450 responses from more
Program and Project projects is of utmost importance, most
than 50 companies reveals
Delivery PMO leaders feel this is their greatest
patterns regarding the
weakness.
PMO’s priorities and state
of maturity.
■■ PMO leaders have invested in developing
Governance strong functional governance, and they
widely recognize its importance.
■■ PMO leaders believe that they need to

Portfolio Prioritization
get better at portfolio prioritization and
and Resource Planning
resource planning and utilization.
■■ PMO leaders are dissatisfied with

Stakeholder Management their organization’s ability to manage
stakeholders.
■■ Staff and leadership development

Staff and Leadership activities are not prioritized, even though
Development PMOs and EPMOs both recognize the
critical skills gap in their talent pool.

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PMOs place the highest
priority on governance
TOP PMO PRIORITIES
and program and project Average = 1.16
delivery activities. 5
Highest Priority
High Importance
■■ Across PMOs, the following Business Decision-
activities have high 4.5 Making Efficiency
Project-Level
importance and a large Perception of PMO Project Manager
Stakeholder
Project Portfolio Value Proposition Skills and Outlook
maturity gap: Management
Metrics Collection
PMO–Level Stakeholder
and Reporting
–– Project-level stakeholder Clarity of PMO Mandate Management
4
management and Expectations Portfolio Prioritization Benefits Realization
Project Manager
Average Importance1
PMO Performance
–– PMO–level stakeholder Hiring Practices
Resource Availability Measurement
Project Managers’ Critical
management
Important
and Allocation Managing Project Financials
Project Manager Skills Development
Hiring Practices Risk Management
–– Project manager skills 3.5 Project Management
PMO Autonomy Best Practice Sharing Project Effort Estimation
and outlook Rigor and Efficiency
Project Manager Organizational
–– Perception of PMO value Performance Evaluation Change Management
and Incentives Career Path
proposition
3
Project Manager Career Path
–– Business decision-making
Low Importance
efficiency Vendor Management
–– Portfolio prioritization
2.5
–– Resource availability
and allocation
–– PMO performance Lowest Priority
measurement 2
0.5 0.7 0.9 1.1 1.3 1.5 1.7 1.9
–– Benefits realization
Maturity Gap2
Governance Staff and Leadership Development Portfolio Prioritization and Resource Planning
Stakeholder Management Program and Project Delivery Average Value
n = 39.
1 Importance is measured on a 1–5 scale where 1 is the lowest and 5 is the highest.
2 Maturity Gap equals importance minus maturity.
Source: Anatomy of a World-Class PMO, 2011 data.

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www.pmo.executiveboard.com Executive Key Detailed Recommended
PMOEC1054611SYN
Executive Summary 5

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DEVELOPING THE Anatomy of a world-class PMO

Research Methodology
1. Anatomy Development 2. Member Validation 3. Survey Participation 4. Comparative Analysis 5. Presentation of Findings
GoVERnAnCE STAKEholdER MAnAGEMEnT INFORMATION TECHNOLOGY PRACTICE

PMO EXECUTIVE COUNCIL
Clarity of pMo Mandate perception of pMo pMo Autonomy pMo performance project-level Stakeholder pMo-level Stakeholder Vendor Management project portfolio Metrics
and Expectations Value proposition Measurement Management Management Collection and Reporting
Ability to clearly articulate level of understanding and Degrees of freedom Ability to measure Consistency and Consistency and Extent to which the PMO Extent to which the PMO
the PMO’s mission, acceptance of the PMO’s given to the PMO to set and demonstrate PMO effectiveness in approach effectiveness of the supports vendor selection can provide a holistic
responsibilities, and value proposition governance dimensions performance and impact to managing relationships PMO leadership’s efforts and management activities value-based view of project
objectives within its own organization on business outcomes year over the project/program to engage its various portfolio health
over year lifecycle constituencies
project Manager
Skills and outlook
Extent to which project
managers demonstrate a
Key Findings from

business-outcomes focus
and are viewed by project
sponsors as partners rather
than mere task masters
organizational Change
Management
Ability to manage projects
project Manager
hiring practices
Degree to which project
the Anatomy of a
World-Class PMO
such that they do not manager hiring and
STAFF And lEAdERShIp dEVElopMEnT
result in overwhelming selection practices assess

poRTFolIo pRIoRITIzATIon And RESoURCE plAnnInG
organizational change for proficiency in critical

end users thinking and general
management skills
project Effort Estimation project Manager

Rigor and Efficiency performance Evaluation
Consistency and accuracy and Incentives
of project effort estimation Extent to which project
manager performance
evaluations focus on
business outcomes
attainment
Resource Availability project Managers’ Critical

and Allocation Skills development
Ability of PMO’s capacity Extent to which PMs’ skills
planning and resource development approach centers
utilization tracking efforts to on developing leadership,
anticipate and prevent staff relationship building, and
resource bottlenecks for general management skills and
funded projects business knowledge
portfolio prioritization Managing project Risk Management Benefits Realization Business decision-Making Adaptability of project project Management project Manager
Financials Efficiency Management Methodology Best practice Sharing Career path
Degree to which PMO is Degree of rigor applied Ability to comprehensively Extent to which project Ability to focus business Degree of flexibility PMO’s ability to foster Extent to which PM career
able to effectively move to projecting project cost identify and compare risks management approach partner involvement on the built into standard learning in the project paths are clearly defined
resources and funds to implications over the full across the project portfolio focuses on delivering most critical project and project management management community and aligned to general
highest value projects lifecycle, including post- business outcomes portfolio trade-off decisions methodologies management career paths
midstream rollout
© 2011 The Corporate Executive Board Company. All Rights Reserved.
pRoGRAM And pRojECT dElIVERY
Update maturity model Seek feedback from Relaunch survey with an Compile results to establish Publish key findings from
and define maturity levels. member companies initial cohort of 46 member benchmark and understand the survey.
on model. companies. PMO trends.
Select Participating PMOEC Member Companies

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Participants in the
Anatomy of a World-
Benchmark Demographics
Class PMO reflect a
broad range of revenue Revenue Band
bands and organizational Participant Distribution
structures.
18%
> $20 B
41%
9% < $3 B
$10 B–$20 B
32%
$3 B–$10 B
n = 46.
Organizational Structure
Participant Distribution
22% 13%
EPMO Centralized
Non–IT Focused
PMOs
78% 49%
PMO Centralized
IT–Focused
PMOs 31%
Decentralized IT–
Focused PMOs
7%
Decentralized Non–IT–
n = 46. n = 46.
Focused PMOs
Note: Numbers may not add up to 100% due to rounding.

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PMOEC1054611SYN
Introduction 9
Participants in the
anatomy represent
Benchmark Demographics (Continued)
a diverse set of
organizations. Industry
Participant Distribution
3% 6%
Media Pharmaceuticals
3%
17% Telecommunication Services
Health Care
6%
Food, Beverages, and
Tobacco
3%
Automotive and Transport
12%
Government
3%
Energy and Utilities 23%
Banking, Financial
Services, and Insurance
9%
Manufacturing
3%
Construction
3%
Computer Software
3% 6%
Chemicals Business Services
n = 46.

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11
PMOs place the highest

value on governance and
IMPORTANCE OF PMO ACTIVITIES
stakeholder management
activities. Average Importance1
■■ PMOs place less importance

on staff and leadership Perception of PMO Value Proposition 4.17
development activities. Project-Level Stakeholder Management 4.15
Project Manager Skills and Outlook 4.12
Business Decision-Making Efficiency 4.06
Benefits Realization 3.93
PMO–Level Stakeholder Management 3.9
Clarity of PMO Mandate and Expectations 3.87
Resource Availability and Allocation 3.85
Portfolio Prioritization 3.83
Project Portfolio Metrics Collection and Reporting 3.81
PMO Performance Measurement 3.8
Adaptability of Project Management Methodology 3.7
Project Managers’ Critical Skills Development 3.7
Risk Management 3.68
Managing Project Financials 3.64
Project Manager Hiring Practices 3.55
3.55
Project Management Best Practice Sharing 3.47
3.47
Project Effort Estimation Rigor and Efficiency 3.47
3.47
PMO Autonomy 3.45
3.45
Organizational Change Management 3.43
Project Manager Performance Evaluation and Incentives 3.31
Project Manager Career Path 2.98
Vendor Management 2.75
2.0 Average Importance = 3.68
n = 34.
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PMO maturity across all
categories remains low
MATURITY OF PMO ACTIVITIES
relative to the Council’s
five-point scale. Average Maturity1
■■ The most mature PMO

activities are the following: Adaptability of Project Management Methodology 2.95
–– Adaptability of Clarity of PMO Mandate and Expectations 2.94
project management Project Portfolio Metrics Collection and Reporting 2.92
methodology 2.84
Perception of PMO Value Proposition
–– Clarity of PMO mandate Business Decision-Making Efficiency 2.81
and expectations
Project Manager Hiring Practices 2.74
–– Project portfolio metrics Project Manager Skills and Outlook 2.71
collection and reporting
PMO Autonomy 2.63
Portfolio Prioritization 2.61
Project Management Best Practice Sharing 2.57
Project Managers’ Critical Skills Development 2.54
Project Manager Performance Evaluation and Incentives 2.52
Resource Availability and Allocation 2.49
Risk Management 2.41
PMO–Level Stakeholder Management 2.39
Project Manager Career Path 2.37
Project-Level Stakeholder Management 2.32
PMO Performance Measurement 2.22
Managing Project Financials 2.18
Organizational Change Management 2.17
Project Effort Estimation Rigor and Efficiency 2.16
Vendor Management 2.12
Average Maturity = 2.52
n = 34.
1 Maturity is measured on a 1–5 scale where 1 is the lowest and 5 is the highest.

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PMOEC1054611SYN
Key Findings 13
Relative to each other,

EPMOs have developed
EPMO AND PMO Relative STRENGTHS
more mature governance
and stakeholder Difference Between EPMO and PMO Maturity of Relevant Attributes
management activities,
while PMOs have
developed more mature
EPMO Strengths
tactical activities.
Clarity of PMO Mandate 0.74
and Expectations
■■ EPMOs manage stakeholders
significantly better than
PMOs both at the project PMO–Level Stakeholder 0.65
and PMO level, although Management
PMOs seem to be superior at
ensuring benefits realization.
Project-Level Stakeholder 0.58
Management
■■ EPMO leaders recognize that
they are less successful at
evaluating PM performance, Other 17 factors did
creating incentives, and not exhibit statistically
significant differences.
managing visibility of
PMO Strengths
resource availability.
Project Manager Performance
Evaluation and Incentives 0.35
Resource Availability
and Allocation 0.35
Maturity
n = 36 PMOs and 15 EPMOs.

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Higher maturity is
correlated with PMOs
Impact of Tenure
that have been stable
for longer periods. Maturity by Age of PMO
■■ However, much of the

maturity is gained relatively 3.31
early on; PMO maturity
tends to plateau after about
two years until more than 10
years. 2.49 2.51
2.31
■■ Although not quite
significant at our threshold, Average Maturity 1.91
the PMO budget is also
positively correlated with
higher maturity, but the
number of employees
assigned to the PMO is not.
■■ This divergence could

suggest that some
organizations might
be getting a return from
hiring more expensive Less Than 1–2 Years 2–4 Years 4–10 Years More Than
and more talented PMO One Year 10 Years
leadership.
Age of PMO
n = 34.

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PMOEC1054611SYN
Key Findings 15
PMO executives
agree on the level of
Agreement on What is Important
importance of four of Standard Deviation of Responses
the five top-priority All Respondents
areas. Average = 0.66
5 High Consensus/ Low Consensus/

■■ There is clear consensus High Importance High Importance
on four activities that rank
the highest on the basis of
4.5 Project-Level
average importance scores: Perception of PMO Value
Business Stakeholder Project Manager
Decision- Management Proposition
–– Perception of PMO value Skills and Outlook
Making PMO–Level Stakeholder
proposition Efficiency Benefits Management Clarity of PMO
Realization Portfolio PMO Performance Mandate and Resource Availability
–– Project-level stakeholder 4 Prioritization Measurement Expectations and Allocation
Average = 3.68
Project Portfolio
management Metrics Collection Risk
Adaptability of
and Reporting Management
Importance
Project Managers’ Critical Project Management

–– Business decision-making Skills Development Methodology
Managing
efficiency Project Financials
3.5 Project Effort
Project Manager PMO
–– Benefits realization Hiring Practices Autonomy Project
Organizational Estimation
Change Management Rigor and
Management Best Efficiency
Practice Sharing
■■ The value of enhancing Project Manager
3 Performance
project manager skills and Evaluation and
outlook is widely disputed Incentives Project Manager
across the membership, Career Path
although it ranks as the Vendor

third highest in average 2.5 Management
importance.
High Consensus/ Low Consensus/
■■ Some organizations are Low Importance Low Importance
ranking vendor management 2
as a high priority, which 0.4 0.5 0.6 0.7 0.8 0.9
could signal a trend toward Spread of Importance Responses
increased externalization
of IT service delivery.
n = 293 respondents from 30 organizations.

PMO Executive Council Source: Anatomy of a World-Class PMO, 2011 data.

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Seniormost PMO
executives mostly
PMO LEADERS SHOW MODERATE CONSENSUS ON WHAT
agree on the level of
importance of the top
IS MOST IMPORTANT
stakeholder management Standard Deviation of Responses
and governance PMO Executives
Average = 0.89
activities.
5 High Consensus/ Low Consensus/
High Importance High Importance
■■ However, there is wide
Perception of PMO Project Manager
disagreement on the Value Proposition Skills and Outlook
importance of portfolio 4.5
Project-Level
prioritization and resource Stakeholder Business Decision-
Management Making Efficiency Clarity of PMO
planning activities. Mandate and PMO Performance
Expectations Measurement
Average = 3.78
PMO–Level
4 Risk Benefits
Stakeholder Project Portfolio Metrics
Management Collection and Reporting Management Realization
PMO Autonomy and Allocation
Importance
Project Managers’ Critical Managing

Skills Development Project Financials
Project Manager
3.5 Portfolio Prioritization
Hiring Practices Project Manager Performance
Adaptability of Project Project
Evaluation and Incentives
Management Methodology Management
Best Practice Organizational Change Management
Project Effort Estimation Sharing Project Manager
Rigor and Efficiency Career Path
3
2.5 Vendor
Management

Low Importance Low Importance
2
0.6 0.7 0.8 0.9 1 1.1
Spread of Importance Responses


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Key Findings 17
PMO staff considers

program and project
PMO STAFF agrees on the important activities
delivery activities Standard Deviation of Responses
important but disagree PMO Staff
Average = 0.90
on the level of
5.0 High Consensus/ Low Consensus/
importance of staff and
High Importance High Importance
leadership development Project Portfolio
PMO–Level
Stakeholder
activities. Metrics Collection Management
Managing and Reporting
4.5 Business Decision-
Project Financials Project-Level Making Efficiency
Clarity of PMO Mandate Stakeholder
Management Perception of PMO
and Expectations
Value Proposition
Project Manager
PMO Performance
Skills and Outlook
Measurement
Average = 3.76
4.0 Risk Resource Availability
Adaptability Benefits Management and Allocation
of Project Realization
Management
Importance

Methodology
Portfolio Skills Development
3.5 Prioritization Project Manager Performance Organizational
Evaluation and Incentives Change
Project Manager Management
Hiring Practices Project
Project Manager
Management
PMO Project Effort Estimation Career Path
Best Practice
Autonomy Rigor and Efficiency Sharing
3.0
Vendor
Management
2.5

Low Importance Low Importance
2.0
0.80 0.85 0.90 0.95 1.00 1.05 1.10
Spread of Importance Responses

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KEY TAKEAWAYS
1. Organizations face the greatest maturity gap in project stakeholder management, and PMOs have a greater gap than
EPMOs.
2. Higher maturity is correlated with PMOs that have been stable for longer periods. However, maturity improvement
is uneven over the years—plateauing after the first two years and then rising again after 10 years.
3. PMO budget is positively correlated with higher maturity, but the number of employees assigned to the PMO is not.
This could suggest that some organizations might be getting a return from hiring more expensive and talented PMO
leadership.
4. Vendor management appears to be an emerging priority. While most members rank it low in importance, some are
focusing on this area, which may suggest a move toward brokering capabilities as IT services are externalized.
5. Although heads of PMOs realize the importance of PM skills and outlook, they still somewhat disregard the value of
staff and leadership development activities.

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Key Findings 19

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21
Distribution of Responses
Critical High Importance Important Low Importance Very Low Importance
Aggregate Importance1
Governance Stakeholder Management Staff and Leadership Development Program and Project Delivery
1% 1% 1% 2% 1% 1% 2% 3% 3% 3% 2% 2% 2% 1% 2%
1% 2% 1% 1% 1% 2%
3% 4% 1% 3% 3% 2% 3%
6% 10% 5% 3% 4% 6% 7% 6% 9%
11% 5% 8% 7%
11%
15% 13% 16% 15%
22% 18%
24% 25% 24% 22% 25%
20%
25% 25% 23%
25% 33% 31% 30%
34% 33%
35%
35%
31%
42%
43% 41%
43%
43% 42% 41% 44%
43% 44%
34% 38%
48%
47% 47%
43% 41%
45%
42% 38% 45% 34%
39%
29%
39% 42%
22%
31% 34% 31%
29% 30% 27% 29% 29%
20% 22% 19% 20% 21%
15% 16% 18%
14% 13% 11% 13%
8%
Clarity of PMO Mandate
and Expectations
Perception of PMO
Value Proposition
PMO Performance
Measurement
PMO Autonomy
Project-Level Stakeholder
Management
Project Portfolio Metrics

Collection and Reporting
Management
Vendor Management
Project Manager Skills

and Outlook
Project Manager
Hiring Practices

Skills Development

Project Management
Best Practice Sharing
Project Manager
Career Path
Business Decision-
Making Efficiency
Benefits Realization
Managing Project
Financials
Adaptability of Project
Management Methodology
Risk Management
Project Effort Estimation

and Allocation
Organizational Change
Management
n = 34.

IT PRACTICE
Distribution of Responses (Continued)
Level 1 Level 2 Level 3 Level 4 Level 5
Aggregate Maturity1
Governance Stakeholder Management Staff and Leadership Development Program and Project Delivery
11% 10%
12% 14% 14% 14% 17%
22% 21% 23% 20% 20%
26% 23% 25% 24%
29% 28%
30% 35% 32%
37% 35%
22% 32%
31% 30% 22%
31% 18%
32%
23% 28%
18% 25%
37% 11%
44% 34%
44% 34% 46% 54%
28% 35% 27%
31%
32% 44% 33%
32% 45%
35% 35% 41% 37% 33%
40% 40%
29% 26%
21% 23% 27% 14% 19% 28%
21% 23%
20% 17%
19% 1% 22%
15% 18%
17% 14% 14% 13% 15%
11% 9% 8% 9% 13% 11% 13% 10%
9% 8% 11% 8% 9%
5% 4% 1% 1% 6% 2% 3% 2% 2% 2% 2% 1% 3% 2% 2% 1% 2% 2% 1%
Clarity of PMO Mandate
and Expectations
Perception of PMO
Value Proposition
PMO Performance
Measurement
PMO Autonomy
Project-Level Stakeholder
Management

Management
Vendor Management
Project Manager Skills

and Outlook
Project Manager
Hiring Practices

Skills Development

Project Management
Best Practice Sharing
Project Manager
Career Path
Business Decision-
Making Efficiency
Managing Project
Financials
Adaptability of Project
Management Methodology
Risk Management
Project Effort Estimation

and Allocation
Organizational Change
Management
n = 34.

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Detailed Findings 23
Governance and
stakeholder management
DIFFERENCES in priorities ACROSS PMOs
rank as the activities with
the most consensus on Activity Importance1
90th Percentile Median 10th Percentile
importance across PMOs.
5
■■ The importance of the
following activities has the
most differentiation across
4
PMOs:
–– Resource availability
and allocation
–– Organizational change Importance 3
management
–– Vendor management
2
■■ The importance of the
following activities has the
least differentiation across
PMOs: 1
Clarity of PMO Mandate and Expectations
PMO Performance Measurement
PMO Autonomy
Project-Level Stakeholder Management
Project Portfolio Metrics Collection

and Reporting
PMO–Level Stakeholder Management
Vendor Management
Project Manager Skills and Outlook
Project Managers’ Critical Skills Development
Project Manager Performance Evaluation

and Incentives
Project Manager Hiring Practices
Project Management Best Practice Sharing
Business Decision-Making Efficiency
Managing Project Financials
Risk Management
Adaptability of Project Management

Methodology
Resource Availability and Allocation
Organizational Change Management
Project Effort Estimation Rigor and Efficiency

–– Business decision-making
efficiency
–– Project manager hiring
practices
–– Project management best
practice sharing
n = 34.
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Staff and leadership
development activities
DIFFERENCES in maturity ACROSS PMOs
show the greatest
differences in maturity. Activity Maturity1
90th Percentile Median 10th Percentile
5
■■ The activities that have
the greatest difference in
maturity across PMOs are
the following: 4
–– Project manager
performance evaluation
Maturity
and incentives
3
–– Project manager hiring
practices
–– Project manager career
path 2
■■ The activities with the least

difference in maturity across
PMOs are the following: 1
Clarity of PMO Mandate and Expectations
PMO Performance Measurement
PMO Autonomy
Vendor Management
PMO–Level Stakeholder Management

Project-Level Stakeholder Management

and Incentives
Project Managers’ Critical Skills Development
Project Manager Skills and Outlook
Project Manager Hiring Practices
Project Management Best Practice Sharing
Business Decision-Making Efficiency
Managing Project Financials
Risk Management

Methodology
Resource Availability and Allocation
Organizational Change Management
Project Effort Estimation Rigor and Efficiency

–– PMO autonomy
–– Project-level stakeholder
management
–– Risk management
–– Benefits realization
n = 34.
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PMOEC1054611SYN
Detailed Findings 25

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PMOEC1054611SYN
27
To help close the

maturity gap in program
Recommended Resources
and project delivery, the
Council recommends the Program and Project Delivery
following resources.
PMO Executive Council research shows on-time and on-budget delivery does not guarantee project benefits
■■ Access the Council’s
topic centers on Program realization. In fact, on average, projects that are delivered 90% on-time and on-budget achieve a little more
Management and Project than one-half of their expected business outcomes.
Management Methodology. These results suggest that PMOs that primarily focus on delivery outcomes place the project and the
function’s contribution to business value at risk. Leading PMOs develop objective criteria for evaluating
project business cases and make business partners aware of interdependencies and risks to benefits
realization. In addition, they adapt project management methodology to project characteristics, such as size
and complexity.
Relevant Council Resources

■■ Add a value lens to project milestones | See BMO Financial’s “Leading Indicators of Project Benefit
Realization”
■■ Target project management activities that have the greatest impact on project success | Review our
quantitative analysis of the Twenty-Seven Drivers of Business Outcome Attainment
■■ Use complexity filters to assess project risk | See BMO Financial’s “Close-Ended Complexity Assessment”
toolkit
■■ Develop templates for each step of the project execution lifecycle | Access our topic center for Project
Management Methodology Tools and Templates
■■ Manage interdependencies across projects | Access the replay of our webinar on “EPMO Essentials:
CareFirst’s Program Interdependency Visualization”

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To help close the
maturity gap in
governance, the Council
recommends the Governance
The traditional PMO focus on process adherence often comes at the expense of business benefits realization,
■■ Access the Council’s topic
center on Enterprise PMO but this approach is coming under question. To strengthen its value proposition, a PMO must take greater
Maturity. responsibility for business outcomes and alignment with business goals. Leading organizations clearly define
the role of all PMOs in the organization and identify activities that are best performed by a central function.
In addition, they communicate their value contribution to stakeholders. In the early stages of maturity,
organizations concentrate metrics on process consistency. At the next stage, they focus reporting on the
successful delivery of projects. At the highest level of PMO maturity, PMOs select portfolio value metrics.

■■ Develop the PMO mandate based on business partner priorities | See U.S. Cellular’s “Tiered Mandate
Calibration approach”
■■ Define the scope of EPMO services | Review Health Care Service Corporation’s approach of “Transitioning
to an EPMO”
■■ Measure PMO innovation and employee engagement | See Xcel Energy’s “PMO Dashboard”

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PMOEC1054611SYN
Recommended Resources 29
To help close the

maturity gap in portfolio
prioritization and
resource planning, the Portfolio Prioritization and Resource Planning
Council recommends the
Comparing project value accurately and efficiently across the portfolio is challenging as approaches vary
across business units. Without standard criteria, prioritization decisions can be subjective and political
topic centers on Portfolio in nature. To compare projects more easily, leading organizations clearly define assessment criteria
Management and Resource and measurement guidelines. To ensure that the overall project portfolio composition reflects strategic
Management. objectives, these organizations also create a target portfolio structure and allocate funding accordingly.
In addition, leading organizations map resource needs at the portfolio level up front to enable high-level
capacity planning. They track interdependencies to make mid-flight course corrections and reallocate
resources to “driver” projects, which other projects depend on for success. In doing so, they expand the
view of interdependencies beyond project milestones to consider where projects share end users and where
successful execution of one project might depend on the adoption of another.

■■ Screen project proposals | See ExxonMobil’s “Up-Front Urgency/Value Triage” template
■■ Decide on the optimal level of portfolio risk and value | See Ameriprise’s “Risk-Based Portfolio Balancing”
technique
■■ Plan capacity across projects | See CareFirst’s approach to “Providing Directional Guidance On Resource
Planning”
■■ Prevent bottlenecks by assessing project interdependencies | See CareFirst’s “Program Interdependency
Visualization” technique
■■ Sequence projects to maximize end-user adoption | See California State Automobile Association’s “End
User-Focused Portfolio Rebalancing” approach

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To help close the
maturity gap in
stakeholder management,
the Council recommends Stakeholder Management
the following resources.
Projects with engaged stakeholders are more likely to realize business outcomes. In fact, highly engaged
■■ Access the Council’s topic
center on Stakeholder stakeholders can boost project business outcome attainment by 30%. Yet, less than 20% of PMOs create
Management. formal stakeholder management plans to improve engagement.
Progressive organizations target engagement efforts based on stakeholder influence, paying special
attention to end users, who determine benefits realization. In addition, they proactively educate
stakeholders to improve the quality of their participation and assign project resources based on stakeholder
characteristics.

■■ Segment stakeholders by their role in implementing change | See Nokia’s “Stakeholder Segmentation Map”
■■ Map project manager skills to stakeholder needs. | See Air Products’ “Entrepreneurial Skills-Based Resource
Allocation” approach
■■ Develop onboarding guidelines for sponsors | See Cadbury and Mutual of Omaha’s “Streamlined Business
Sponsor Onboarding” approach

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PMOEC1054611SYN
Recommended Resources 31
To help close the

maturity gap in staff and
leadership development,
the Council recommends Staff and Leadership Development
the following resources.
PMO Executive Council research shows that project manager effectiveness is the most important factor in
topic center on Staff and achieving business outcomes on a project. Moreover, as project portfolios become more diverse with the rise
Leadership Development. of SaaS and social computing, project manager ability to fluidly adapt project management techniques to
new types of project needs will be critical for capturing value. Ongoing success depends on the PMO’s ability
to identify the right talent and focus development on the most important skills to build highly effective
project managers.
Council analysis of high-performing project managers shows that certification and methodology training
do not significantly improve project manager effectiveness. Leading PMOs design their hiring process to
test for entrepreneurial skills such as leadership and stakeholder management and focus development on
these skills. Meanwhile, they ensure performance evaluation criteria promote ownership and maximization of
business outcomes, rather than measuring solely project execution.

■■ Identify characteristics of effective project managers | Access our quantitative analysis for Understanding
Project Manager Effectiveness
■■ Allocate resources based on the demand and supply of entrepreneurial skills | See Air Products’
“Entrepreneurial Skills-Based Resource Allocation” approach
■■ Develop hiring criteria for entrepreneurial project managers | Review our guidelines for “Hiring Effective
Project Managers”
■■ Provide training on skills aligned to the top drivers of project manager effectiveness | Access our
E-Learning Center to Develop Key Project Management Skills

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33
PMO Maturity Framework

Attribute Description Attribute Description
Governance Project Manager Extent to which PM career paths are clearly defined
Clarity of PMO Mandate The PMO’s ability to articulate its mission, responsibilities, Career Path and aligned to general management career paths
and Expectations and objectives clearly Project Management PMO’s ability to foster learning in the project management
Perception of PMO Value Level of understanding and acceptance of the PMO’s value Best Practice Sharing community
Proposition proposition Program and Project Delivery
PMO Autonomy Degrees of freedom given to the PMO to set governance Adaptability of Degree of flexibility built into standard project
dimensions within its own organization Project Management management methodologies
PMO Performance Ability to measure and demonstrate PMO performance and Methodology
Measurement impact on business outcomes year over year Business Decision- Ability to focus business partner involvement on the most
Stakeholder Management Making Efficiency critical project and portfolio trade-off decisions and to
optimize the delegation of decision making authority
Project-Level Stakeholder Consistency and effectiveness in approach to managing
Management relationships over the project/program lifecycle Benefits Realization Extent to which project management approach focuses
on delivering business outcomes
PMO–Level Stakeholder Consistency and effectiveness of the PMO leadership’s
Management efforts to engage its various constituencies Risk Management Ability to identify and to compare risks comprehensively
across the project portfolio
Vendor Management Extent to which the PMO supports vendor selection and
management activities Managing Project Degree of rigor applied to projecting project cost
Financials implications over the full lifecycle, including post-rollout
Project Portfolio Metrics Extent to which the PMO can provide a holistic value-based
Collection and Reporting view of project portfolio health Portfolio Prioritization and Resource Planning
Staff and Leadership Development Portfolio Prioritization Degree to which PMO is able to move resources and funds
effectively to highest value projects midstream
Project Manager Skills Extent to which project managers demonstrate a business-
and Outlook outcomes focus and are viewed by project sponsors as Resource Availability Ability of our capacity planning and resource utilization
partners and Allocation tracking efforts to anticipate and to prevent staff resource
bottlenecks for funded projects
Project Manager Hiring Degree to which project manager hiring and selection
Practices practices assess proficiency in critical thinking and general Project Effort Estimation Consistency and accuracy of project effort estimation
management skills Rigor and Efficiency
Project Manager Extent to which project manager performance evaluations Organizational Change Ability to manage projects such that they do not result
Performance Evaluation focus on business outcomes attainment Management in overwhelming organizational change for end users
and Incentives
Project Managers’ Extent to which project managers’ skills development
Critical Skills approach centers on developing leadership, relationship
Development building, general management skills and business
knowledge

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Governance Maturity Levels
Governance
Clarity of PMO Mandate and Expectations Perception of PMO Value Proposition PMO Autonomy PMO Performance Measurement
Level 1 ■■ Our PMO’s mandate is ambiguous. ■■ Outside constituencies do not ■■ Our PMO’s scope of discretion is not well ■■ Our PMO does not formally measure
■■ Our PMO’s mandate is not formalized. understand how our PMO adds value understood. and report its own performance.
to project execution. ■■ Management does not engage with our ■■ Our PMO performance reporting
■■ Senior executives have not established
clear expectations and actionable goals
■■ Our PMO’s efforts are often resisted, PMO, making it difficult to understand focuses on process adherence, such
for our PMO. and we are usually perceived as how much autonomy our PMO really has. as how broadly we have trained PMs,
"bureaucrats." standardized processes, and the extent
to which projects are following the
standard methodology.
Level 2 ■■ Our PMO has an informal mandate ■■ Our PMO’s value proposition is ■■ Our PMO somewhat understands its ■■ Our PMO has a formal dashboard/
that is generally accepted by key PMO understood by some but not by a degrees of freedom. scorecard to report PMO performance to
stakeholders: the project management majority of stakeholders. ■■ Our PMO must obtain external approval our key stakeholders on a regular basis.
community, senior leadership, and ■■ Most stakeholders are skeptical that our for changing its organizational structure. ■■ Our PMO performance reporting focuses
business partners. PMO actually add value. Our PMO is on execution success—such as schedule
■■ Our PMO has no budgetary authority
■■ The mandate is not formalized or tied to usually perceived as "overhead." and is bound by corporate formulas for and budget compliance, change orders,
actionable goals for our organization. goals and compensation. and sponsor satisfaction—for projects
■■ Our PMO suffers from "mandate creep" and programs as well as in aggregate
our mandate encompasses far too many and at the portfolio or BU level.
attributes for us to be successful.
Level 3 ■■ Our PMO’s mandate is clear and focused. ■■ Our PMO’s value proposition is ■■ Our PMO understands its degrees of ■■ In addition, PMO dashboard/scorecard
■■ Our PMO’s mandate is written down. understood by most stakeholders. freedom. reports on some forward-looking metrics
■■ Stakeholders are still skeptical that our ■■ Our PMO has some freedom to adjust at the project level to enable operational
■■ Our PMO’s mandate is understood by the success of project management, e.g.,
internal project management community. PMO actually adds value. our organizational structure and resource
allocation. percentage of tasks with resources
■■ Our PMO’s mandate is not understood by assigned over the next 30, 60, 90 days
all key stakeholders, i.e., senior leadership
■■ Our PMO has little internal budgetary or resource utilization by role by month
and business partners. authority. for the entire year.

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Appendix 35
Governance Maturity Levels (Continued)
Governance
Clarity of PMO Mandate and Expectations Perception of PMO Value Proposition PMO Autonomy PMO Performance Measurement
Level 4 ■■ Our PMO has a clear, formalized, and ■■ Most stakeholders understand our ■■ Our PMO has wide latitude to set ■■ Our PMO’s performance is reported
focused mandate accepted by all key PMO’s value proposition. We are usually incentive structures and training based on program- and portfolio-level
PMO stakeholders including business perceived as "value enablers." priorities, to make hire/fire decisions, and business outcomes such as portfolio-
partners and the project management to delegate authority and responsibility level returns, value realization, end-user
community. throughout the organization. adoption, and success at supporting
■■ Our PMO does not regularly calibrate our enterprise business objectives, such
mandate to reflect changes in business as cost reduction, customer growth,
priorities. acquisition integration, etc.
■■ Our PMO also reports on key constraints
to portfolio value realization, such as
critical resource gaps, interdependencies
and key risks.
■■ Our PMO’s dashboards are short and
simple, tracking 12 to 18 metrics.
Level 5 ■■ Our PMO has a clear, formalized, and ■■ Our PMO is actively sought out to assist ■■ Our PMO has wide latitude to set ■■ Our PMO uses forward-looking leading
focused mandate accepted by business with early phases of project definition. incentive structures and training indicators to forecast future PMO
partners and the project management ■■ Our PMs are seen as "value generators." priorities, to make hire/fire decisions, and performance and to understand and
community. to delegate authority and responsibility recommend changes that should be
■■ Our PMO regularly partners with senior throughout the organization. made today to meet year-over-year
leadership and other business and ■■ In addition, our PMO has the ability to performance objectives.
project community leaders to calibrate influence compensation decisions for
our mandate and identify new ways we full-time and/or part-time PMs outside
can add value. its direct control.

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Stakeholder Management Maturity Levels
Stakeholder Management
Project-Level Stakeholder Management PMO–Level Stakeholder Management Vendor Management Project Portfolio Metrics Collection
and Reporting
Level 1 ■■ Our PMO offers no standard guidance on ■■ PMOs at our organization have a ■■ Our PMO is not involved in the evaluation ■■ Our PMO does not yet have the right
stakeholder management. siloed view of their mandate. There is of the performance or selection of third- tools and processes to aggregate
■■ Stakeholder management attributes are considerable amount of redundancy in party vendors in projects. portfolio-level data centrally.
at the discretion of individual project our mandates (PMs).
managers (PMs). ■■ We only discuss our PMO’s performance
■■ Stakeholder management effectiveness on an ad hoc basis with our management
varies greatly from PM to PM and is and rarely have that conversation with
highly dependent on overall experience, business partners.
PM’s personal connections, and PM’s
number of years at the company.
Level 2 ■■ The standard project management ■■ Our PMO only has an ad hoc relationship ■■ Our PMO uses nonstandard metrics, ■■ Our PMO tracks budget and schedule
methodology includes optional tools with other PMOs at our organization. usually developed by individual project performance for projects, but our PMO’s
and templates for basic stakeholder ■■ As PMO leaders, we meet regularly teams as part of the performance ability to aggregate portfolio-level data
management. with management to discuss our PMO’s assessment and reporting attributes. beyond that is compromised by the
■■ Our PMO disaggregates the business- performance, but interactions with ■■ The PMO is not involved in third-party diversity of metrics tracked and the
facing relationship component from the partner constituencies are ad hoc and provider selection decisions. absence of standard definitions and data
project management component by inconsistent. collection protocols.
pairing the pm with a business liaison.
The business person is expected to bring
the relationship management skill to the
project.
Level 3 ■■ Our PMO focuses on PM training to ■■ Our PMO regularly meets with other ■■ Our PMO uses a standard set of vendor ■■ Our PMO consistently tracks budget
ensure better stakeholder management. PMOs at the organization to discuss our performance metrics as part of our and schedule performance for projects
■■ Our PMO offers formal guidance on mandate, performance, and to examine project performance assessment and as well as other lagging indicators of
business sponsor engagement, relying on ways we can reduce redundancies. reporting attributes, but data is not project risk but has not developed ways
standard descriptions of sponsor roles ■■ Our PMO effectively involves other PMOs consistently rolled up to the portfolio to anticipate risk.
and responsibilities as well as standard in governance of multi-BU projects. level.
templates to capture stakeholder ■■ As PMO leaders we discuss our PMO’s
■■ The PMO provides input but is not
communication. mandate and performance during regular formally involved in third-party provider
■■ PMs oversee the creation of meetings with our management and selection decisions.
communications calendars and assign other senior executives from business
specific communication tasks to units.
sponsors at each project phase to drive ■■ Our PMO is limited in our ability to
stakeholder engagement. control by influence.

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Appendix 37
Stakeholder Management Maturity Levels (Continued)
Project-Level Stakeholder Management PMO–Level Stakeholder Management Vendor Management Project Portfolio Metrics Collection and
Reporting
Level 4 ■■ Our PMO manages stakeholder ■■ We discuss our PMO’s mandate ■■ Our PMO monitors a few standard ■■ Our PMO tracks some forward-looking
relationships by focusing on both the PM and performance during regular vendor performance metrics that are indicators of project risk such as
and the sponsor. meetings with all stakeholders, aggregated at the portfolio level to resource availability by role. Our PMO
■■ Our PMO coaches and facilitates including representatives from support broader efforts for efficient monitors and reports on program
business sponsors on impact and timing middle management and the project third-party selection and management. interdependencies.
of most effective business engagement management community. ■■ Our PMO hasn’t standardized project
with the project team. ■■ Our PMO also has formal reporting and value metrics enough to gain portfolio-
communication vehicles to report back level views of value generated.
to those constituencies.
Level 5 ■■ Stakeholder management is a primary ■■ In addition, our PMO aggressively ■■ Our PMO has identified key forward- ■■ Our PMO has defined a standard set
focus of our PMO, especially for high-risk seeks stakeholder feedback and we looking drivers of standard vendor of business metrics to assess project
projects. publicly hold ourselves accountable performance metrics and aggregates value realization and standardized
■■ Our PMO broadens the definition of to communicate the progress we are them at the portfolio level to develop a data collection protocols in order to
stakeholders to include end users as well making on their suggestions and key view on future performance. aggregate and to report overall portfolio
as business sponsors. initiatives. returns.
■■ Our PMO provides guidance to PMs on
■■ Our PMO makes recommendations to
how to assess organizational receptivity senior management for rebalancing the
or resistance to change. portfolio based on overall risk and value
of investments.
■■ Our PMO provides explicit guidelines
on key data inputs required to build
a consistent stakeholder profile that
includes various categories of end users.

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Staff and Leadership Development Maturity Levels
Staff and Leadership Development

Project Manager Skills and Project Manager Hiring Project Manager Project Managers’ Critical Project Manager Career Project Management Best
Outlook Practices Performance Evaluation Skills Development Path Practice Sharing
and Incentives
Level 1 ■■ Our PMO does not yet ■■ Our PMO has little or no ■■ Our PMO has little control ■■ Our PMO has little or no ■■ PMs are promoted by ■■ Our PMO has no formal
systematically understand control over the PMs that over PM performance budget for training or skill criteria established within best practice sharing
the core competencies of it hires or uses. reviews. development. other organizations and mechanism.
the PM staff. ■■ Performance review ■■ Skill transfer is done our PMO has little ability ■■ Learnings are shared
■■ Different executives criteria are set centrally informally through ad hoc to influence promotion informally and
have very different and do not address PM- mentoring and on-the-job criteria. inconsistently, and our
perspectives of our specific skills. training. PMO does not know if
PMO’s core skills and PMs actually use this
competencies. information to influence
their project planning and
management.
Level 2 ■■ Our PMO’s PMs have a ■■ Our PMO screens ■■ Our PMO evaluates PMs ■■ Our PMO’s project ■■ Our PMO creates a ■■ Our PMO formally tracks
primarily administrative candidates for primarily on compliance management skills promotion path for PMs best practices shared
focus. They do a good demonstrated project with methodology, development approach based largely on tenure. among project teams.
job of filling in key management experience budgets, and schedules. focuses on methodology ■■ Project management ■■ But our PMO does not
documentation, reporting or a project management training and reliance on is primarily viewed as have formalized reviews
on data and milestones. certification, such as PMP, external certification a destination job, and in each project’s lifecycle
■■ Our PMO’s PMs don’t Scrum Master, or Prince2. programs. hence our PMO doesn’t designed to capture
view themselves have a lot of rotation in best practices or lessons
as leaders of the and out of PM jobs. learned.
organization
■■ PMs take a command
and control approach to
management rather than
empowering their teams.

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Appendix 39
Staff and Leadership Development Maturity Levels (Continued)

and Incentives
Level 3 ■■ Our PMO’s PMs are ■■ Our PMO looks beyond ■■ Our PMO evaluates PMs ■■ Our PMO offers ■■ Our PMO creates a ■■ Our PMO tries to
effective process experience and on sponsor satisfaction as training on our project promotion path for document project
administrators. They do certification and focuses well as compliance with management approach. PMs based on their “lessons learned” and
a good job of building on finding candidates methodology, budgets, Additionally, our PMO demonstrated ability best practices at the
project plans and who have a competence and schedules. complements that with to deliver successfully conclusion of major
managing the project’s in learning agility, ■■ Our PMO also considers training on leadership, projects of a given size projects.
resources against problem solving, and PMs’ proficiency on "soft problem solving, and and/or complexity. ■■ But compliance is
plan, but they are less business judgment. skills" such as leadership, stakeholder management ■■ However, most of our spotty, and our PMO’s
involved in business case ■■ But our PMO does communications, as well as with informal PMO’s PMs are destined ability to store and
development. not provide standard stakeholder management, mentoring. to remain in PM jobs. retrieve this information
■■ They usually deliver guidelines to recruiters and problem solving ■■ Our PMO seeks to expose is compromised by
projects to budget and to identify these skills in skills in evaluating their the PM community to the limitations of our
schedule. Most of our PM candidates. Quality of performance. senior business leaders. knowledge sharing tools.
PMO’s PMs recognize the new-hire PM varies by ■■ For important projects
that they must build interviewer(s). at risk, our PMO is
relationships to drive sometimes able to
results, but don’t consider harness the wisdom of
benefits realization to be our most experienced
part of their job. PMs, but our PMO
struggles to do this
consistently.

IT PRACTICE

and Incentives
Level 4 ■■ Our PMO’s PMs view ■■ Our PMO screens ■■ Our PMO has shifted the ■■ Our PMO offers ■■ Our PMO has ■■ Our PMO consistently
themselves as leaders candidates for project focus of performance training on the project standardized PM job documents best practices
who drive attainment of management proficiency evaluations to how well management approach. descriptions and has and “lessons learned” at
business outcomes. as well as learning agility, PMs have achieved However, our PMO’s skills rationalized the PM career the end of every project,
■■ They build excellent problem solving, business business outcomes. development efforts ladder with a logical and has an effective,
project plans, manage judgment, and key “soft ■■ Our PMO still relies on focus on developing progression of skills. widely used platform
project resources against skills” such as ownership subjective measures such leadership, relationship ■■ Our PMO has a defined to communicate these
plan, and are highly and accountability, as sponsor satisfaction, building, general program/portfolio lessons to the broader PM
involved in business influencing skills, poise but tries to make it management skills, and manager track to retain group.
case development and with executive audience, more objective by business knowledge. some of the more
realization. ability to inspire trust, and disaggregating sponsor experienced PMs to
verbal communication. satisfaction into specific help coach and mentor
■■ They understand the
project’s broader
■■ Our PMO provides metrics on the way the the less tenured PMs
business context and are standard guidelines for project was managed and handle complex
deft at managing mid- PM hiring. and the degree to which programs.
stream course corrections it delivered its intended
without compromising benefits post-rollout.
project outcomes.

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Appendix 41

and Incentives
Level 5 ■■ Our PMO’s PMs view ■■ Our PMO screens ■■ Our PMO primarily rates ■■ Our PMO offers ■■ Our PMO has created ■■ Rather than trying to
themselves as stewards of candidates for general PM effectiveness by training on our project a dual-track PM build a lessons learned
business value who have management ability as the level at which they management approach. progression to support database, our PMO has
the flexibility to drive well as other key “soft support the attainment of ■■ However, our PMO’s skills both career PMs and instituted thorough
business value through skills” referred to earlier. business outcomes. development efforts rotational PMs. peer-review processes
their own decisions. ■■ To test for these skills, ■■ Business outcome focus on developing ■■ Promotions are based that ensure that we
■■ Their core skills and our PMO uses case-based attainment is objectively leadership, relationship on demonstrated ability consistently and reliably
competencies center interviews that draw measured through building, general to deliver business harness the wisdom
on business acumen, upon real-life, “tough call” pre-defined metrics management skills, and outcomes on projects of of our PMO’s most
critical thinking, project situations that a established in the project business knowledge. increasing scale and risk. experienced PMs to
conflict resolution, and PM might face. charter. help manage the risks
■■ Our PMO relies on of important projects by
stakeholder management. ■■ Our PMO is open to ■■ Our PMO also ties a experiential forms of participating in major
■■ They actively partner hiring from the business portion of the PM’s learning, assigning senior stage-gate reviews.
with sponsors and and teaching them the compensation to the mentors to junior PMs,
hold themselves jointly basics of how we manage actual attainment of providing consistent
■■ They are also assigned
accountable for benefits projects. business outcomes. coaching and role playing to facilitate retrospective
realization. exercises, and matching “lessons learned” sessions
people to projects in a at the conclusion of
■■ Our PMO has a process major projects and
for effectively onboarding way that allows them
to work safely on their to disseminate best
and utilizing part-time practices.
PMs. individual development
objectives.

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Program and Project Delivery Maturity Levels
Program and Project Delivery

Adaptability of Project Business Decision-Making Benefits Realization Risk Management Managing Project Financials
Management Methodology Efficiency
Level 1 ■■ With no standardized ■■ Business partner roles are not ■■ Our PMO tracks project ■■ Our PMO has no consistent ■■ PMs use their own best
methodology, or guidelines; well defined or understood performance primarily on their methodology to identify or to estimates to determine build
our PMO relies on certified or ■■ Project/program risk mitigation on-time and on-budget delivery. measure risk across projects. and implementation costs.
experienced PMs to deliver decision-making authority is not ■■ Our PMO has no role in defining
projects effectively, and they established. project-specific benefits
execute on an ad hoc basis. metrics.
Level 2 ■■ Our PMO uses a standard, one- ■■ Stakeholder roles are known ■■ Our PMO’s involvement in ■■ Our PMO monitors a standard ■■ Project investments are
size-fits-all project management and widely understood benefits management is limited set of risks applied to all evaluated based on their
methodology for all projects. ■■ But decision-making authority to partnering with the business projects. Usually, these risks cost to build and implement
■■ Project teams may not follow for risk mitigation and issue to create business cases for are directly related to on-time using standard, established
methodology steps and resolution is not established. project proposals. and on-budget project delivery guidelines.
guidelines consistently. ■■ Our PMO usually defines a set (e.g., missing schedule dates or
of business outcomes for every budget overruns).
project, but these benefits
often turn out to be difficult or
impossible to measure and are
different for every project.
Level 3 ■■ Our PMO offers several ■■ Our PMO establishes clear ■■ Our PMO triages business case ■■ Our PMO has business unit– ■■ Our PMO uses historical data to
methodology tracks delivering escalation paths for issues that definition and benefits tracking specific standardized guidelines estimate build, implementation,
different levels of process rigor. might lead to re-baselining rigor level based on project size, consistently applied at project and post-rollout maintenance
■■ Projects are assigned a of project cost, schedule, or relative impact, and strategic or program level. spend and to segment the
methodology track based on benefits. importance, ensuring that ■■ Our PMO tracks a set of portfolio-using drivers for
an early-stage assessment of ■■ Decision-making authority for the most important projects standard risks for all projects maintenance effort to estimate
project complexity and risk. most escalation paths defaults have sound justification and belonging to the BU; depending support resources reliably.
directly to the executive oversight. on business needs and
sponsor and/or steering ■■ Our PMO has a standard priorities, these risks may differ
committee approach for auditing the considerably among BUs.
benefits realization track ■■ However, quality of risk
record of the largest projects identification largely depends
(5-20% of the projects, usually on the PM.
representing 80% of project
spending).

IT PRACTICE
Appendix 43
Program and Project Delivery Maturity Levels (Continued)

Adaptability of Project Business Decision-Making Benefits Realization Risk Management Managing Project Financials
Management Methodology Efficiency
Level 4 ■■ Our PMO has a flexible ■■ From project inception, our ■■ Our PMO has an integrated ■■ Our PMO customizes a ■■ Our PMO collaborates with
management methodology PMO encourages PMs to suite of standard metrics that standard set of risks and Finance to evaluate total cost
that requires all projects to collaborate with business apply to a majority of our metrics for every project, using of ownership (TCO) for the
comply with a minimal set of partners to ensure a common projects. the BU’s established priorities full project lifecycle. To inform
deliverables deemed critical for understanding of project or ■■ In addition, our PMO has as a guidepost. TCO assumptions, our PMO
business outcome attainment. program success. consistent, objective ways ■■ This creates a baseline maintains a repository of cost
■■ Beyond that, our PMO offers ■■ Based on this understanding, to evaluate these metrics, understanding of risk for even estimates and actual TCO costs
advice on how to identify the our PMO develops clear although these metrics the junior, inexperienced PMs. for major projects.
key project risks and assigns decision-making authority for are almost exclusively ■■ Our PMO aggregates these risks
and tracks accountability for all foreseen residual risks. lagging indicators of project into a small number of discrete
mitigating them. performance. categories for reporting.
■■ The emphasis is on attributes
and communication rather than
on written deliverables.
Level 5 ■■ Our PMO empowers the best ■■ Our PMO actively seeks to ■■ Our PMO identifies and includes ■■ Our PMO monitors a ■■ Our PMO incorporates
PMs to work within a standard push decision-making authority leading and lagging indicators comprehensive list of risks stochastic modeling to
set of guidelines, rather than to down to the lowest competent of benefits realization as a key with closed-ended criteria understand the likelihood of
execute a methodology. level in the project team. component of the business (project size, complexity, achieving the TCO.
■■ Our PMO does not specify case that sponsors must sign sponsorship, interdependencies,
deliverables or events, but off before development begins. etc.) to enable consistent risk
focuses on value-adding ■■ Our PMO provides executives management and reporting
attributes and establishing with timely information on both across the project portfolio and
escalation paths and clear to balance project execution across the organization.
triggers for getting outside success and business outcomes ■■ Our PMO includes risk
governance involvement. realization. management effectiveness in
PM performance evaluation
criteria.

IT PRACTICE
Portfolio Prioritization and Resource Planning Maturity Levels
Portfolio Prioritization and Resource Planning

Portfolio Prioritization Resource Availability and Allocation Project Effort Estimation Rigor Organizational Change Management
and Efficiency
Level 1 ■■ Our PMO cannot influence project ■■ Our PMO is often surprised by ■■ Project effort estimation is an ad hoc ■■ The portfolio prioritization process,
selection or prioritization decisions. unexpected project resource attribute that is highly dependent on the whether owned in our PMO or externally,
■■ Our PMO does not allocate resources; bottlenecks due to lack of visibility to quality and experience of the PM and does not take into account change
resources are allocated by BUs. the commitments of key subject-matter project team members. management.
experts (SMEs) or technicians upon ■■ Project teams do not get access to the ■■ Our PMO is unable to anticipate end-user
whom projects depend. right SMEs, and hence the teams come readiness, which impedes the ability
up with their own "guesstimates," which to help the organization realize the full
tend to vary in accuracy. value of the project portfolio.
Level 2 ■■ Our PMO cannot influence project ■■ Our PMO does not systematically track ■■ Our PMO relies on SMEs to inform and ■■ The portfolio prioritization process
selection or prioritization decisions. resource capacity. to validate project effort estimation for considers end-user commonalities when
■■ Our PMO allocates resources to projects ■■ Our PMO tracks and secures business high-priority projects. sequencing projects at the portfolio-
on a first-come-first-served basis, and and technical SMEs through informal ■■ However, our PMO’s approach is still level.
once approved projects continue to networks. ad hoc and the resulting accuracy is ■■ Our PMO helps our PMs prioritize change
completion unimpeded. ■■ Our PMO uses individual savvy to resolve inconsistent, as SMEs are overburdened management efforts in the final stage of
project-level bottlenecks, but this often by estimation requests. the project.
leads to unintended consequences for
portfolio performance, such as over-
reliance on external resources.
Level 3 ■■ Our PMO applies standard project ■■ Our PMO tries to prevent bottlenecks by ■■ Our PMO has formalized project effort ■■ Our PMO informally anticipates
approval criteria, such as business value, requesting business and technical SMEs’ estimation by building a repository of organizational friction points and
degree of fit with enterprise objectives, availability for our most critical projects. effort estimates, drawn by SMEs, based sequences and paces projects to
urgency, and risks to execution, to ■■ However, our PMO has no systematic on past experience and audited regularly maximize user absorption, but the
select projects or programs across the way of anticipating bottlenecks across for accuracy. methods are not scientific and the results
organization. the portfolio, because it lacks visibility ■■ Our PMO has codified the drivers of are mixed.
■■ However, our PMO is not able to into SME commitments. project complexity such that we can tie
withdraw funds or resources from ■■ Our PMO has tried to match supply and them to levels of effort, and can come up
a project. demand more consistently by using with consistently accurate estimates.
software tools to aggregate resource ■■ However, our PMO’s estimates are based
utilization and forecast data, but has on most-likely scenario rather than a
been unable to harmonize the data to range of scenarios.
achieve consistent portfolio-level views.

IT PRACTICE
Appendix 45
Portfolio Prioritization and Resource Planning Maturity Levels

(Continued)
Portfolio Prioritization Resource Availability and Allocation Project Effort Estimation Rigor and Organizational Change Management
Efficiency
Level 4 ■■ Our PMO monitors projects through their ■■ Our PMO achieves aggregate, ■■ For projects that involve features or ■■ Our PMO uses consistent objective and
execution phase and reevaluates their "directionally correct" views of resource situations in which our PMO lacks subjective criteria to understand the
business case as business conditions supply and demand by regularly and experience, and hence have high levels current level of readiness for change
change. systematically matching resource of uncertainty, we harness the wisdom in each part of the organization to
■■ Our PMO has the power to stop in-flight utilization data with portfolio resource of our best experts to build best, worst, understand how to phase upcoming
projects where the business case has needs to identify major surpluses or and most likely scenarios for resource projects to maximize user absorption.
significantly changed, or when higher- shortages of skilled resources. requirements. ■■ End-user commonalities are formally
ROI projects enter the portfolio. ■■ Our PMO aggregates this data at ■■ Our PMO applies high-level contingency included and tracked as part of
the level of the roles, rather than the funding and schedules estimates based interdependency management.
individuals involved. This gives our PMO on the risk profile of the project and our
enough lead time either to change the confidence in estimates.
sequence of project work, to bring
external contractors, or to reprioritize
SME work assignments for the
bottlenecked roles.
Level 5 ■■ Our PMO helps executives allocate ■■ Our PMO adds a dimension of skill and ■■ Our PMO uses stochastic modeling to ■■ Our PMO uses consistent criteria to map
resources toward a mix of projects competency matching on top of simple determine the profile of likely schedule the aggregate degree of change across
designed to maximize long-term experience/risk-level requirements to and budget outcomes and uses this time for the portfolio and to adjust
enterprise value. These may include elevate project execution efficiency. to determine contingency funding implementation timelines to maximize
projects ranging across the risk spectrum and high-confidence schedules when absorption.
including "principled bets," i.e., high-risk developing the project baseline.
but also high-value projects.

IT PRACTICE
Benchmarking By Revenue Band
< $3 B $3 B–$10 B $10 B–$20 B > $20 B

n = 14. n = 11. n = 3. n = 6.
Attribute Imp. Mat. Imp. Mat. Imp. Mat. Imp. Mat.
Governance
Clarity of PMO Mandate and Expectations 4.08 3.08 3.67 2.74 4.00 2.67 3.68 3.16
Perception of PMO Value Proposition 4.20 2.91 4.04 2.89 4.53 2.27 4.15 2.89
PMO Autonomy 3.54 2.51 3.31 2.66 3.53 2.27 3.45 3.01
PMO Performance Measurement 3.96 2.10 3.47 2.12 4.20 2.13 3.80 2.72
Project-Level Stakeholder Management 4.10 2.29 4.16 2.25 4.33 2.27 4.16 2.55
PMO–Level Stakeholder Management 3.82 2.38 3.98 2.19 4.07 1.87 3.88 3.05
Vendor Management 2.90 2.35 2.72 1.96 2.87 1.80 2.38 2.07
3.85 3.01 3.85 2.72 3.73 2.47 3.70 3.30
and Reporting

Project Manager Skills and Outlook 3.98 2.52 4.26 2.78 4.27 2.33 4.14 3.23
Project Manager Hiring Practices 3.53 2.64 3.55 2.56 3.73 2.87 3.49 3.25
3.28 2.45 3.41 2.53 3.47 1.80 3.13 3.01
and Incentives
Project Managers’ Critical Skills Development 3.64 2.58 3.63 2.37 4.27 2.53 3.69 2.78
Project Manager Career Path 2.76 2.21 3.01 2.35 3.53 1.87 3.17 3.03
Project Management Best Practice Sharing 3.23 2.66 3.48 2.36 3.93 2.47 3.80 2.79

IT PRACTICE
Appendix 47
Benchmarking By Revenue Band (Continued)
< $3 B $3 B–$10 B $10 B–$20 B > $20 B

n = 14. n = 11. n = 3. n = 6.
3.64 2.61 3.57 3.03 4.67 3.53 3.61 3.32
Methodology
Business Decision-Making Efficiency 4.02 2.66 4.02 2.77 4.67 2.60 3.91 3.35
Benefits Realization 4.01 2.42 4.03 2.43 3.53 1.80 3.75 2.51
Risk Management 3.62 2.5 3.64 2.31 4.00 1.87 3.72 2.67
Managing Project Financials 3.61 2.13 3.57 2.2 3.93 1.73 3.69 2.46

Portfolio Prioritization 3.72 2.55 3.96 2.69 3.93 2.47 3.82 2.68
Resource Availability and Allocation 3.79 2.36 3.96 2.42 4.53 2.53 3.42 2.91
Project Effort Estimation Rigor and Efficiency 3.51 2.15 3.40 2.30 3.47 1.73 3.49 2.13
Organizational Change Management 3.60 2.16 3.46 2.29 3.53 1.33 2.91 2.39

IT PRACTICE
Benchmarking By Industry
Banking, Financial Health Care and

Government Others
Services, and Insurance Pharmaceuticals
n = 4. n = 14.
n = 8. n = 8.
Governance
Clarity of PMO Mandate and Expectations 4.10 3.28 3.64 2.74 4.00 3.22 3.73 2.87
Perception of PMO Value Proposition 4.40 2.97 4.40 2.88 3.94 3.14 4.22 2.68
PMO Autonomy 3.61 2.72 3.50 2.69 2.92 2.06 3.38 2.55
PMO Performance Measurement 3.98 2.45 3.73 2.41 3.33 1.67 3.69 2.14
Project-Level Stakeholder Management 4.32 2.67 4.03 2.25 4.22 2.17 4.05 2.25
PMO–Level Stakeholder Management 4.08 2.61 3.97 2.81 3.67 2.22 3.87 2.43
Vendor Management 2.93 2.26 2.95 2.39 2.39 1.53 2.57 2.09
4.03 3.22 3.97 2.77 3.44 3.08 3.75 2.84
and Reporting

Project Manager Skills and Outlook 4.17 2.87 4.08 2.71 4.06 2.36 3.93 2.60
Project Manager Hiring Practices 3.76 3.11 3.69 2.98 3.44 1.50 3.43 2.54
3.51 2.87 3.18 2.44 3.39 1.44 3.18 2.30
and Incentives
Project Managers’ Critical Skills Development 4.00 3.04 3.82 2.29 3.56 2.36 3.56 2.43
Project Manager Career Path 3.35 2.44 2.94 2.71 2.72 1.31 2.85 2.35
Project Management Best Practice Sharing 3.65 2.93 3.55 2.45 3.53 3.08 3.46 2.50

IT PRACTICE
Appendix 49
Benchmarking By Industry (Continued)
Banking, Financial Health Care and

Government Others
Services, and Insurance Pharmaceuticals
n = 4. n = 14.
n = 8. n = 8.
3.89 3.27 3.95 2.73 3.56 2.97 3.66 2.95
Methodology
Business Decision-Making Efficiency 4.20 3.04 3.86 2.73 4.08 2.67 3.97 2.77
Benefits Realization 3.79 2.62 4.00 2.33 3.94 2.17 3.79 2.27
Risk Management 3.92 2.65 3.31 2.1 3.67 2.64 3.51 2.3
Managing Project Financials 3.98 2.45 3.73 2.15 3.39 1.94 3.48 2.04

Portfolio Prioritization 3.96 2.95 4.00 2.6 3.61 2.03 3.76 2.46
Resource Availability and Allocation 4.17 2.64 3.93 2.83 3.69 1.81 3.72 2.42
Project Effort Estimation Rigor and Efficiency 3.46 2.38 3.3 2.23 3.56 1.67 3.36 2.13
Organizational Change Management 3.68 2.31 2.82 2.00 3.56 1.94 3.20 2.06

IT PRACTICE
This example illustrates
the process of measuring
The Attribute Priority Index (API)
the Attribute Priority
Beta Company Beta Company Attribute
Index (API). Attribute
Average Importance1 Average Maturity1 Priority Index
Clarity of PMO Mandate and Expectations 3 1 6
■■ The API for each of the 23 Perception of PMO Value Proposition 3 5 6
attributes is calculated by PMO Autonomy 2 2 0
measuring the gap between
PMO Performance Measurement 5 1 20
average importance and
Project-Level Stakeholder Management 1 4 3
maturity of an attribute,
weighted by its average PMO–Level Stakeholder Management 4 1 3
importance. Vendor Management 2 2 0
Project Portfolio Metrics Collection and Reporting 3 1 6
■■ A higher API score indicates Project Manager Skills and Outlook 2 5 6
a greater priority to the
Project Manager Hiring Practices 5 1 20
organization.
2 3 2
and Incentives
Project Managers’ Critical Skills Development 3 5 6
Project Manager Career Path 2 4 4
Project Management Best Practice Sharing 1 3 2
Adaptability of Project Management Methodology 2 3 2
Business Decision-Making Efficiency 4 4 0
Benefits Realization 3 2 3
Risk Management 5 1 20
Managing Project Financials 2 3 2
Portfolio Prioritization 1 1 0
Resource Availability and Allocation 4 5 4
Project Effort Estimation Rigor and Efficiency 2 2 0
Organizational Change Management 5 1 20
API For Clarity of PMO Mandate and Expectations

= [(average importance for Clarity of PMO Mandate and Expectations) – (average maturity for Clarity of PMO Mandate and
Expectations)] X [(average importance for Clarity of PMO Mandate and Expectations)]
= [(3) – (1)] X [3] = 2 X 3 = 6
1 All data in this example is fictitious.
IT PRACTICE
PMOEC1054611SYN
Appendix 51

CIO Key Findings From The Anatomy of A World Class PMO

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INFORMATION TECHNOLOGY PRACTICE

PMO EXECUTIVE COUNCIL

Key Findings from

© 2011 The Corporate Executive Board Company. All Rights Reserved.

Project Manager Benchmarking Research

Copies and Copyright Legal Caveat

PMO Executive Council

Executive Key Detailed Recommended

PMO Executive Council

■■ PMO budget is positively correlated with maturity, but the number of

PMO Executive Council

organizational Change project Manager

STAFF And lEAdERShIp dEVElopMEnT

organizational change for proficiency in critical

project Effort Estimation

Resource Availability project Managers’ Critical

pRoGRAM And pRojECT dElIVERY

PMO Executive Council

PMO executives and key

■■ PMO leaders believe that they need to

■■ PMO leaders are dissatisfied with

■■ Staff and leadership development

PMO Executive Council

Stakeholder Management Program and Project Delivery Average Value

Source: Anatomy of a World-Class PMO, 2011 data.

PMO Executive Council

PMO Executive Council

Executive Key Detailed Recommended

PMO Executive Council

DEVELOPING THE Anatomy of a world-class PMO

GoVERnAnCE STAKEholdER MAnAGEMEnT INFORMATION TECHNOLOGY PRACTICE

Key Findings from

result in overwhelming selection practices assess

organizational change for proficiency in critical

project Effort Estimation project Manager

Resource Availability project Managers’ Critical

Select Participating PMOEC Member Companies

PMO Executive Council

PMO Executive Council

Source: Anatomy of a World-Class PMO, 2011 data.

Executive Key Detailed Recommended

PMO Executive Council

PMOs place the highest

■■ PMOs place less importance

■■ The most mature PMO

Source: Anatomy of a World-Class PMO, 2011 data.

Relative to each other,

Benefits Realization 0.38

n = 36 PMOs and 15 EPMOs.

Source: Anatomy of a World-Class PMO, 2011 data.

■■ However, much of the

■■ This divergence could

Source: Anatomy of a World-Class PMO, 2011 data.

PMO Executive Council

5 High Consensus/ Low Consensus/

Project Managers’ Critical Project Management

although it ranks as the Vendor

n = 293 respondents from 30 organizations.

PMO Executive Council Source: Anatomy of a World-Class PMO, 2011 data.

Project Managers’ Critical Managing

High Consensus/ Low Consensus/

Stakeholder Management Program and Project Delivery Average Value

n = 60 respondents from 30 organizations.