Why PMOs don’t work – learning from practical experiences in
non-performing Program Management Offices
KPMG, Melbourne, VIC, Australia
147 Collins Street
Melbourne VIC 300
Phone: +61 3 9288 5953
This paper examines practical experiences on the performance of Enterprise PMOs to suggest
the causes of PMO failures and seeks to provide guidance on how to avoid the pitfalls that can
The observed underlying factors in PMO performance include:
These performance elements are examined to develop a hypothesis on how to implement an
effective PMO to control and co-ordinate an enterprise wide portfolio of projects. A key
learning is that this involves business transformation and organisational change, requiring
more than setting an initial mandate and appointing a PMO Manager.
Keywords: PMO, Program Management Office, Project Portfolio Management
Why is PMO Performance Important?
There is increasing pressure upon business leaders to perform and deliver the full potential of
projects. This is in part due to increasing level of
What do the initials PMO stand for? investments in business projects is increasing and
The term PMO is used quite loosely, and can mean in part due to the increasing focus on governance
different things to different people. Does it stand
for: and financial performance. Accordingly, the use
of formal project management techniques and
• Program management organisation? controls is increasing, led, in many cases, by the
• Project management office?
• Portfolio management office?
increased focus on, and investment, in enterprise
• Project management overhead? (Hopefully not!) level Program Management Offices (PMOs).
The focus of this paper is on the organisational, or
enterprise, level Program Management Office, which
There is an expectation that the establishment of a
typically has a charter for stewardship and reporting PMO for an organisation will result in greater
of all enterprise wide programs, projects and
initiatives. transparency of project performance and
subsequently better control of project investments
and a resultant decrease in project failures and cost over-runs.
An effective Enterprise PMO offers significant benefits to organisations in aligning effort
towards the achievement of corporate strategy, standardising project management practices
and reducing project turnaround times and costs.
Do PMOs Deliver?
In my role as a business advisor focusing on project and program governance and risk
management, I have been involved in assisting organisations in establishing portfolio
management procedures, implementing PMOs and, unfortunately, reviewing what has gone
wrong with some PMOs.
I have observed that many PMOs don’t work as expected within organisations and fail to
meet the intent for which they were established. Many become side-tracked within their
organisations and effectively become project administration and reporting co-ordinators with
very little value add. Inevitably, these wither and die. Some continue to operate but are
perceived throughout their organisation as an overhead (that is, a Project Management
These anecdotal observations seem to be supported by numerous surveys regarding PMO
effectiveness. Hobbs  recently published a white paper for the Project management
Insitute (PMI), analysing the current state of play of PMOs. A notable finding of this paper
was that almost 50% of survey respondents indicated the existence of their PMO was being,
or had recently been, seriously questioned.
The KPMG 2005 Global IT Project Management Survey  found that “While the overall
perceived value of PMOs was positive the use of EPMOs was rare and only 21 percent of
existing PMOs have a mandate to control all projects”.
Santosus  highlighted “in a suvey conducted by CIO and the Project Management Institute
(PMI), 74 percent of respondents said that lower cost was not a benefit of their PMOs.”
Further survey based research by Kendall and Rollins  suggests there is huge executive
resistance to implementing and maintaining an enterprise PMO.
Given that survey based research is generally biased towards the positive, with organisations
with a functioning PMO more likely to respond to surveys than those with past failures, there
is evidence to suggest that many PMOs don’t work and fail to deliver on the promise of
improved project management outcomes for organisations.
Why do PMOs Fail to Perform?
So why do some PMOs fail to perform as expected? Certainly, some failures can be
attributed to “pilot error” or poor management, but I would suggest that this factor alone
cannot account for the high failure level evidenced.
Certainly, there are strong correlations between why projects fail and why program
management offices fail. If we look back at the classic Standish Group’s Chaos Report ,
the following top five reasons for project failures were identified:
1. Incomplete Requirements
2. Lack of user involvement
3. Lack of resources
4. Unrealistic expectations
5. Lack of executive support
Unfortunately, these same reasons are a significant part of why PMOs fail.
I would suggest that establishing and maintaining a PMO also has an additional layer of
complexity to manage – organisational change and resistance.
Considering these factors has led me to hypothesising that there are four common major
performance influencers to the success, or otherwise, of a PMO. These are represented in
figure one below.
Enterprise PM O
Figure 1: PMO Performance Influencers
Typically, non-performing PMOs have insufficient or no influence or control of one or more
of these influencers.
These performance influencers are discussed in greater detail below.
PMOs often fail because they do not have a clear purpose. This can be caused by a number
of factors, commonly including a failure to gain buy-in from the business executive, or a
diffusion of goals.
It is important that the purpose of the PMO is kept in check during the establishment and
development of the office. It is not uncommon to find PMOs without a clear set of priorities
trying to solve all project management issues within the enterprise. Inevitably, having bitten
off more than it can chew, the PMO resources become too thinly spread and often the
important reasons for the PMO existence are forgotten or just not delivered.
Bostian  made a salient observation that “the PMO is in the business to help the
organisation reach its goals. Almost everything else is a waste of effort”.
It is typical to observe that non performing PMOs:
• Are not focussed on ensuring they add value and demonstrably improve portfolio
• Are unable to demonstrate how the enterprise portfolio links to delivery of the
• Fail to understand what PMO services provide value to the Executive;
• Do a lot of reporting but very little analysis; and
• Are lost in efforts to be a “best practice centre of PM excellence” and in co-ordinating
training, without having established their prime value add services.
PMOs are often inappropriately within the organisation, and do not report to, and have
genuine authority from, the Executive. Subsequently, the business line managers learn the
PMO has no governance “teeth” and tend to ignore or pay no more than lip service to the
efforts of the PMO to establish PM standards or procedures.
It is important to note that position is not always reflective of where a PMO sits on the
organisational chart. Position relates to where the line management perceive the PMOs
authority to be.
Often the position issue is symptomatic of the failure to establish both a clear purpose and
engagement model defining how the PMO will work within the organisation. As a result, the
executive get into the habit of by-passing the PMO, eroding its political position. the PMO is
always at risk of having portfolio related decisions made outside of the required and desired
Without the support and engagement of the business leaders, a PMO is unable to make an
meaningful impact. Despite this seemingly obvious observation, PMOs often fail to gain
buy-in from the key senior stakeholders and communicate effectively with the broader
enterprise. As a result, PMO initiatives are “white-anted” or ignored by key stakeholders and
fail to have the desired impact.
Line managers can perceive PMOs to be a threat, fearing the PMO will become too intrusive,
constrain their ability to act with independence and “block” access to the executive. In part
this is a valid fear – the PMO should certainly be seeking to minimise renegade behaviour
within an organisation, reign in waste and place a level of co-ordination over the initiation of
projects within the organisation..
PMOs are often staffed with inappropriate staff, with organisational leaders reluctant to part
with star performing PMs. This significant risk to the performance of PMOs is that
organisationally they become a resting place for the “homeless” resources within the business.
This has obvious detrimental affects upon PMO performance, including:
• Further poor perception of PMO
• Increases PMO cost with little return on value proposition
• Wastes PMO managers time on managing low performers
• Lack of ability to deliver
Clearly, the most important role to
fill in the PMO is that of the PMO
leader. If the PMO is to operate at
the enterprise level, then the PMO Corporate
Leader must be able to work
effectively at this level. The Leader Enterprise Portfolio
must be able to function effectively Change Projects &
across the primary PMO purpose M anagement Programs
elements as represented in Figure 2:
Figure 2: Key Functions of PMO Leader
The size and make-up of the PMO must have a purpose:
• All staff should have a role linked to the PMO purpose
• PMO should have skills valuable to the project management function (such as Change,
Communications and Finance Management)
The Final Factor: Transformation
It is my proposition that there is a final major factor upon PMO performance beyond the
discussed influencers. This final factor relates to the level of effort and successful project
management relating to the initial PMO establishment program. Figure 3 provides a
representation of the overall PMO performance factors.
Organisational PM O
Transformation Enterprise PM O
Figure 3 : Overall PMO Performance Factors
Developing and implementing an Enterprise wide PMO requires more than just the
development of a grab bag of tools, and document templates. It requires significant
Jedd  suggests that a PMO can be established in 30 days or less. While the journey can be
commenced in this time frame, I suggest this thinking grossly undervalues and underestimates
the level of organisational change intrinsic in the establishment of a PMO. I have found that
organisations often consider it to be no more than a two or three month task, predicated upon
find some desk space, re-drafting the organsiational structure diagram and appointing some
people into the identified roles. I do not believe the journey to a fully functioning and value
realising PMO should be measured in weeks or months.
In order to achieve success in a significant organisational change program requires a sustained
and focussed program of work – indeed the actual establishment of the PMO should be treated
as a significant project itself.
Kotter  analysed the difficulties associated with undertaking significant organisatinal
change and transformation projects, identifying eight major errors that are regularly made in
• Error 1: Not establishing a great enough sense of urgency;
• Error 2: Not creating a powerful enough guiding coalition;
• Error 3: Lacking a vision;
• Error 4: Under-communicating the vision;
• Error 5: Not removing obstacles to the new vision;
• Error 6: Not systematically planning for, and creating, short-term wins;
• Error 7: Declaring victory too soon; and
• Error 8: Not anchoring changes in the corporation’s culture.
Consideration of these errors is certainly relevant in the identification of why some PMOs
So What Can Be Done?
A successful PMO offers significant strategic and financial value and benefits to an
organisation. While there is evidence that a significant number of PMO establishment efforts
have not succeeded, the data also shows that many organisations have realised the benefits
from an enterprise PMO.
The effort to create and maintain a PMO can be a worthwhile effort for an organisation.
However, in establishing the PMO model it is important the implementation be treated as a
significant organisational change program and a detailed communication plan be developed
and followed to establish stakeholder buy in and willingness to change and support the PMO.
There needs to be a genuine agreement amongst the business executive and stakeholders that
there is a problem and that a PMO is the solution. Furthermore, the PMO charter and
purposes must clearly reflect a dedication to adding value to the business in a meaningful and
Finally, in my experience, the enterprise PMO journey is not one that can be undertaken in a
matter of weeks or months. Trying to find implementation short-cuts typically results in
performance short comings.
1. Hobbs, Brian. The Multi-Project PMO: A Global Analysis of the Current State of Practice.
2. KPMG Global IT Project Management Survey, 2005
3. Santosus, Megan, Why You Need a Project Management Office (PMO), CIO Magazine
4. Kendall, Gerald & Rollins, Steven. Advanced Project Portfolio Management and the
PMO: Multiplying ROI at Warp Speed, International Institute for Learning, 2003
5. The Standish Group Report. Chaos, 1995
6. Bostian, Barbara. Delivering Business Value: Implementing a Successful PMO
6. Jedd, Marcia. PMO on the Fast Track. PM Network, March 2006
7. Kotter, John. Leading Change: Why Transformation Efforts Fail. Harvard Business
Review, January 2007.