The PMO disadvantage

After reading ‘The PMO advantage’, you might be wondering why every organization isn’t rushing in to create a PMO. I have seen quite a number of enthusiastic senior leadership teams who on further analysis, decided to postpone the idea of setting up a PMO. I’ve listed five common disadvantages I have encountered.

High-level buy in required

Setting up a PMO requires sponsorship from the highest level of the organization. Although a many PMOs can exist at a lower level, to fully realize the advantages of a PMO, it has to be bought in by all senior leadership representing each functional group. Funding, resource deployment and leadership, the requirements of a successful PMO, all are derived from senior management.

Communication

To realize the advantages listed in a previous article, after buy-in from senior leadership is obtained, the organization needs to create a coordination and communication framework between each of the functional groups. Once senior leadership has agreed to a PMO, different expectations of a PMO will start to be raised from the various groups that will want to use the PMO. Insufficient communication between groups has been one of the main hurdles in creating a successful PMO. Silos that have been created and exist in the organization do not disappear overnight just because a PMO has been created.

Complexity

Many large organizations have small PMOs that have been created to run a project or projects for a particular subsidiary. Pooling the resources from across a large organization and creating processes and controls require a deep understanding of how each group is going to gain and be impacted by the changes. The high level of complexity can be extremely daunting, to PMO teams that have not had the experience of operating a project office across multiple geographies, subsidiaries, cultures, and languages.

Underutilization

This is a key disadvantage especially for small to mid-sized organizations. Utilization of project managers within a PMO improves the skills of the project managers, increases morale and realizes the economics of setting up a PMO. Small to mid-sized organizations, especially those that are not in growing markets/industries, tend not to have a robust pipeline of projects to fully utilize a full time PMO. These types of companies are better served by project management consultants, who are then able to better manage their utilization across numerous projects in other organizations.

Operational organization

Some organizations are just not suited for a PMO. Operational types of organizations, especially those in manufacturing, mining and utilities have very limited use of a PMO for their day-to-day operations. These organizations tend to get better economics from engaging management consultants who in turn act as the organization’s PMO.