Key Challenges of a PMO and How Those Lead to Savings

Companies are going through constant change, and since current crisis arose, many have cut costs across all departments in order to ensure business’ continuity. Those who benefit from the services of a PMO or who have planned to do so, may now be pondering whether a PMO is still worth the investments on the long run. Should then, businesses cut fundings from the PMO to cut costs? Or could a PMO actually be the key to cost savings?

Let’s discuss only the main responsibilities of a PMO within a company, responsibilities that really mean savings, on the bigger picture. A PMO can provide with:

1.  Delivery Control

pmo delivery control

Deliveries that meet business’ goals are strongly linked to efficient management of projects at each stage of execution. It is difficult, however, for project managers to oversee several projects simultaneously and make accurate decisions in due time. That’s why a lot of companies use a PMO for achieving a better control on project deliveries, on 3 main aspects: Budget, Time and Quality.

The budget is the lifeblood of the project, time and quality of the delivery depending on it. Statistics reveal that 28% of project failures are caused by inaccurate cost estimates, which means that oftentimes, there is a large gap between predictions and actuals. Minimizing the problem requires, then, skills and experience and this is what a PMO brings.

Firstly, an efficient PMO provides in-depth estimations for projects and project tasks on every level, meaning sales, work, consumables, billability and travel costs estimations. Also, re-estimations are usually needed, and PMOs identifies them as early as possible, assuring cost transparency and good relationship with customers. After that, during the projects’ execution, monitoring how initial calculations are met alongside with quality of deliveries is essential. With the help of project management tools and software, PMOs oversee these aspects through journals – making time and cost reporting – and through approval workflows and billability reporting. This leads to increased accuracy for future projects and, on the bigger picture, the whole process of controlling deliveries through budget, time and quality management results to target meeting and cost savings within organizations.

2. Resource Planning

Whether projects are delivered on-time and on-budget or not is related to effectiveness of resource planning. By including planning as part of resource management, better communication is encouraged within an organization and chances to have blown budgets reduce significantly.

Companies that aim for maximum efficiency with minimum resources hand over this task to PMOs, especially when there are multiple projects going at the same time. To gain a structured organization, resource planning must be done taking into consideration multiple aspects – this is what PMOs are specialized in. When deployment scheduling is made, a clear overview of an employee’s capabilities, skills and experience is essential. Besides, resource availability is important for ensuring that nobody in the team is going to be burnt-out. Also, who would be the best choice for tasks that require to travel? And who could serve as a backfill – or fill in the position of an employee if he must switch to another role or task? Plus, there is a responsibility matrix to be done… and these are only the main guidelines regarding personnel planning. That’s why project management professionals are a go-to for this, due to proven capacity of organizing teams in a way that brings clear structure along with optimized team workflow and budget savings.

3. Transparent KPIs

Transparency within an organization encourages collaboration, motivates employees, and exposes areas of improvement. When all are up to date regarding the main goals of projects and even of the business, it is easier to focus on producing quantifiable results. One sure way to bring clarity into a business is setting and tracking KPIs – on every business level. KPIs help measuring the progress towards the objectives, evaluating performance on projects. But they could be a real aid only if they are easily accessible to anyone. Even if communicating them seems to be a no-brainer, it is surprising how much this task is left undone – and there are many reasons for that.

On the other hand, it is the job of a PMO to keep people informed about the metrics, and this on every organizational level – from executives to team members; whether the performance is good or needs improvements. With a good PM software, PMOs assure that everyone has access to dashboards which show how they’re contributing to overall organization numbers and what they need to do in order to hit their targets.

4. Reporting

Planning budgets, resources and setting KPIs is essential, but how can you know if what has been planned is really happening? Reporting provides a window into what’s taking place within organization’s projects and what has to be done in the future. But where do PMOs stand on that?

One sure thing is that they bring transparency by revealing essential data, contributing this way to better decisions. By using BI tools, project management experts can provide specific and correct information about projects’ scheduling, budgets, customer payments, teams’ work and whether these are aligned with business goals, in every project phase. Also, with a good project management software which features dashboards with relevant project data, decision makers within the organization can gain insight on important matters regarding projects’ development. Bottom line, reporting is essential to business’ financial future, since it increases the accuracy of estimations for future projects which leads to cost savings and helps managing processes and methodologies.

With these being highlighted, we think that PMOs have great importance in keeping things under control within an organization. And control leads to order, efficiency and, of course, financial benefits – that’s why a PMO is worth the investment. But what deeper level activities of a PMO can contribute to projects’ success? We’ll bring additional information about that in our next article.