The Strategic PMO

Insights | 01 February 2013

Flawless execution of the wrong projects is more costly to a business than average execution of the right projects.  In order to provide the best possible value to an organisation, a PMO must ultimately operate from a strategic perspective.

A strategic PMO is one that has a deep understanding of organisational strategies and goals gained through the processes of project and portfolio management (PPM).

In fact, the 2012/13 Project Management Office (PMO) Survey conducted by PM-Partners group highlights the PMOs scope for strategic direction by revealing that 60% of PMOs believe their current value lies in the field of operational or tactical focus, with 30% believing they have a growing level of strategic influence and or value to their organisation.

PPM: The path to ensuring strategic direction

An increased executive focus on project portfolio management (PPM) is the result of a growing concern about running the right projects, and achieving the best possible benefit from each of these.

Unfortunately, executives rarely have a concise way of knowing exactly how many projects are taking place across the organisation, how much the projects have already spent, and how much more spending is required for completion.

Effective PPM ensures several things, including:

  • Projects that add no value to the organisation being disregarded
  • ‘Scarce’ resources allocated to projects that add the most value to the organisation (as opposed to those that are politically better-aligned to bargain for them)

These result in greatly increased outputs because there is less inter-organisational competition for resources and a more stable working environment.

At Texas-based diversified technology services company Schlumberger, Project Office Manager Vincent de Montmollin says the PMO saved more than $3 million by reducing the number of small projects from 233 to 13 by the end of 2003.

Merely implementing a PMO in itself is not enough.  The PMO must evolve over time with a continuous plan to mature the practices that are of the greatest value to executives. As a PMO matures and implements high value services such as portfolio management and resource management, the organisational success metrics improve, and the value of the PMO increases.

Naming Your PMO – A Critical Consideration

The name of a PMO can also have an effect on its operation within an organisation, careful consideration is needed when choosing one.

For example, if a PMO is incorrectly labelled or stakeholders past experiences and bias is ignored the PMO can have an uphill struggle to gain credibility in the eyes of the wider organisation.

The use of expert support is an increasingly popular solution for a PMO when it is implementing the right strategy for its organisation or industry. This approach can be very effective, as external experts have the broad experience across many PMOs, as well as the background to operate at the appropriate level. This can prove vital regarding reinvigoration of a PMO or marketing a PMOs success.

The PM-Partners group is Australia’s most highly accredited project and PMO partner. We are the trusted service provider to Australia’s leading and emerging PMOs. Call us on 1300 70 13 14 for further information.

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