How Much Does A PPM Tool Cost?

How Much Does A PPM Tool Cost?

If you are a Project Management Leader, you have probably got a mess to clean up. Maybe things keep going off track, maybe you have no easy way to measure what’s going on, or maybe you are just tired of struggling through portfolio reports at midnight when you yell, “There has to be a better way!” The good news is, there is a wide variety of Project and Portfolio Management (PPM) solutions that can help you more effectively manage your project delivery. Better yet, these PPM solutions have become very accessible, are easy to use, and powerful. But of course, as soon as we start considering tools, the first question that comes up is: What is this PPM tool going to cost me?

Your ultimate bill for a PPM can be surprisingly low – or surprisingly high. Unfortunately, it can be difficult to get a clear bottom-line answer for the total cost of a solution – and even then, the costs you are probably thinking of are only part of the picture.

So, how much will a PPM cost me?

At Kolme Group, our team has built, run and helped to improve project management organizations around the world. In doing so, we have facilitated the selection and implementation of various PPM tools, we are well acquainted with the process of getting to the costs involved.

Like you, we have faced the challenge of trying to understand the true costs of implementing a PPM solution. That is why in this article, we are giving a straight and simple answer as best we can on this complex topic.

Keep in mind, there are many components that will impact your costs. So, we will walk you through the most impactful factors and a few examples. We will also share tips for managing your implementation costs and getting the most value from your PPM investment.

Please Note! These examples are by necessity general in nature, and will likely differ from your unique use case.

Furthermore, the cost estimates we will share in this article are very conservative – you will likely find that you can negotiate better pricing.

The simple (and incomplete) answer

PPM software and basic onboarding costs are a starting point but not the entire picture. Below, we’ve chosen two starting point examples, for each of the three tiers, but read on to discover the “true costs” you’ll be looking at.

An Enterprise Class PPM Solution

Clarizen, Clarity, Workfront, ServiceNow PPM, etc

Full-featured tools like these will likely cost $60-$100 per full-function user, per month for licensing. In addition, you should plan for a one-time services cost for basic configuration and onboarding assistance. This could range from $30,000 – $100,000 or more, depending on your organization’s complexity.

  • # of Licenses
  • 50
  • 150
  • Annual Licences
  • $42,000
  • $100k-150,000
  • One-Time Fee
  • $30,000
  • $100,000
  • First-Year Costs
  • $72,000
  • $200K – $250,000

 

Simple Task Management Tools

Asana, Trello, Monday.com

Tool such as these are used mostly to organize task activities with no integrations or customized reports. They will cost $16 – $25 per user, per month for licensing. These typically do not involve or even have options for external services for configuration or implementation. You should, however, factor in your own time to learn the tool and the resource time needed to train your team on how to use it.

  • # of Licenses
  • 50
  • 150
  • Annual Licences
  • $12,600
  • $37,800
  • One-Time Fee
  • $0
  • $0
  • First-Year Costs
  • $12,600
  • $37,800

 

Mid-Tier Systems

SmartSheets, MS Project O365

These fit somewhere in between the two types previously mentioned. These systems will run you around $25 per user, per month, though implementation costs can be highly variable in this tier. If you have the time and the experience, you can decide to implement it yourself, or engage an implementation partner and pay $10,000 – $50,000 for professional onboarding support.

  • # of Licenses
  • 50
  • 150
  • Annual Licences
  • $15,000
  • $45,000
  • One-Time Fee
  • $20,000
  • $50,000
  • First-Year Costs
  • $35,000
  • $95,000

Software cost estimates, above, reflect typical “list prices” which can often be negotiated down especially if you have larger volumes, have a pre-existing relationship with that particular software vendor, or commit to a longer contract (1-3 years).

Pro Tip

PPM license costs can be highly negotiable in certain circumstances. If you are able to negotiate lower costs, be sure those discounts apply to any additional licenses in case you need to grow.

The Basic Onboarding costs we have described so far are for relatively straightforward deployment of the solution and getting the team onboard. Costs in these ranges would not typically yield a fully customized solution for your organization (integrations, configurations for your specific business processes, etc.).

Basic Onboarding typically includes:

  • Initial setup and configuration of the system
  • User account import and permissions setup
  • Basic project lifecycle configuration
  • Basic financial configuration
  • Minimal report development
  • User training, onboarding and go-live support

Please Note! You can spend 10% or 10x this amount depending on your needs. As you will see below, there are a few key areas that can really increase or decrease inflate your costs.

But… I can get “free” or cheap bundled licenses!

Yes licensing costs, especially for the more full-featured PPM tools, can be highly negotiable depending on volume. This can be an important factor for tool selection and consideration, but be cautious! Unless you are a small shop using a freemium service, ‘on the house’ licenses are never really going to be “free”.

Many product companies use a bundling tactic to expand their software footprint. Software companies often bundle PPM software with other products or services to give you the impression you’re getting it for free, or at least at a steep discount. In these cases, a sweetheart license price structure can seem like a great deal…at first. In the long run, though, you may find you are better off paying more for a system that actually meets your needs rather than struggling with the wrong tool just because you got a “good” deal.

A previous client had gone through the pain of implementing not just one, nor two – but three different resource management tools before they found a good fit. The first tool was selected because it was an add-on to their ERP, and you guessed it!… licenses were offered at a steep discount. The second tool was “free” as part of a bundled enterprise software suite and they fell for the bundle tactic.

Unfortunately by the third tool, the time (both in duration and level of effort) coupled with the erosion of their credibility with their stakeholders, ended up costing them many times over the license discount they received. Not to mention, the lost opportunity costs during the 4-year journey to ultimately find the right tool.

The lesson here, is that while license cost is an important consideration, there are other costs to consider, both hard and soft. More importantly, if the tool does not meet your needs, you’ll never gain the value from it to justify those discounted licenses.

At Kolme Group we care and want to help you get the best out of your PPM Tool. Join Kim Essendrup for a Free, 15-minute consultancy to discuss your
PPM Tool needs and best steps forward

What really impacts your PPM Tool costs?

There are a few key areas that have the greatest impact on your overall PPM tool costs. Understanding these areas can help you identify which items on your PPM wish-list are going to cost you the most so you can start to understand your must-haves versus your nice-to haves from a cost perspective.

Key cost areas:

  • Licensing Types
  • Integrations
  • Customization & Automation
  • Unique Use Cases
  • Support and Enablement Approaches
  • User Training, Onboarding and Go-Live Support

Licensing

The license tier or license type you choose can impact your licensing costs by -50 to +100%. Take the time to figure out which license level you really need, rather than leaving it up to the supplier.

PPM licenses are typically broken out into different types/tiers depending on the user role in the system. These types will vary by PPM, but typically include:

License typeDescription
Requestor / ReportLimited access license allowing a user to request work, perform basic interaction or access reporting. This license type is usually the lowest price point.
Team Member / Time EntryAllows for project team members to access and update assigned work and log time.
Planner / FullFor project and portfolio managers, allows a user to edit, assign, and report on modules within the system.

Pricing can be dramatically different between the license types and this can have a huge impact on your costs. For example, Requestor or Team Member licenses can cost a fraction compared to those of the Planner tiers.

Pro Tip

When drafting out your PPM scope, take the time to identify each “persona” in your organization and what they need to do in the system.

Understanding each persona needed in your organization will help guide the conversation with prospective PPM suppliers and ensure the right license level for each of your personas. You will want to avoid moving through the sales cycle only to find out that you purchased the wrong license types.

We have had some customers who ended up having to push through a last-minute PO to increase their license counts right before go-live since they incorrectly assumed the permissions given available to the roles in the system. The sponsor was not pleased to learn a day before go-live their annual revenue was going to increase by double.

In the reverse scenario, we worked with a different customer that had surveyed stakeholders within the organization and largely inflated the number of licenses needed. It ended up taking 5 years of increased user-adoption throughout the organization to match the number of users in the system to that of the license counts in the contract purchased.

Below is a simplified version of a how you might map out a persona matrix to help quantify your license needs:

Figure 1 – Sample Persona Matrix to help quantify license requirements

 

Integrations

Integrations can add $10,000-$50,000 to your implementation costs, per integration. Very sophisticated custom integrations can be $100,000 or more

Integrations with external systems is another possible large impact to your PPM cost. Projects don’t live in isolation inside your organization and consequently neither does your project data. You can increase value when adding automation and centralized reporting by integrating your PPM with other systems, but it can get really expensive.

Typical integration points include:

  • Directory services for identity + access management automation
  • ERP for budgeting, actual costs, and revenue forecasts
  • File repository for document collaboration
  • Agile tools
  • Ticketing or IT System Management tools for project intake or reporting
  • HR systems for user data and time off
  • Data warehouse or reporting services

Integrations also vary highly in costs depending on the method used to build the connection. The right method for you depends on your budget but you’ll also want to assess the volume, frequency and uniqueness of your integration requirements.

Typical integration methods, from least to most costly, are:

  • File-based

    Are triggered manually for infrequent updates, or for frequent updates, use automated scripts, emails or basic automation. These are a good option for an inexpensive start and provides an opportunity for using the tool before investing time + cost for a complex integration.

  • Commercial Middleware

    These integration platforms are nice if you have simple requirements. Often, PPM providers will have favored platforms or may have their own middleware platform. Common platforms like Workato, Jitterbit, SnapLogic or Zappier can give you a reasonably quick start to getting your integration up and running. Keep in mind, you may still have some custom development + another platform added to your cost outline.

  • Custom API

    Typically require the most development resources, but they’ll grant the you powerful control over the integration. If you can build one without commercial middleware, that’s one less ongoing cost to worry about.

Pro Tip

Discover if your organization has the capability to develop in-house integrations. This will save you a significant investment in professional services, and also give you the ability to adjust/expand on that integration in the future.

Regardless of your approach, be sure you have a clear understanding of what you want from each integration, including what data flows, which direction, and how often. This will help ensure you get what you need and helps your provider give the most accurate cost based on those requirements.

Customization & Automation

Customizations and automation can add a little (~10%) or a lot (~2x or 3x) to your general onboarding costs

Full-featured PPM tools offer amazing levels of customization and automation to increase your organizations efficiency. In fact, the more important question is not can the tool automate this process, but should it automate this process.

Our advice: Start with the minimum amount of customization and automation – focus on critical simple processes and fundamental adoption of the tool. As your users become more comfortable with the system, you can add additional functionality and automation. This makes onboarding easier and increases your short + long-term adoption.

A common example of this “minimum lovable product” approach is seen during new project requests. Often, a PPM tool is implemented to support the consolidated project intake and review process across previously siloed departments. While providing enormous value to an organization, some get excited and roll-out too much, too early on.

Typically, clients add sophisticated workflow automations before the organization has adopted the simple concept of the aforementioned, this consolidated project intake process..

Pro Tip

It’s best to start simple and then add more after adoption is successful.

When considering your PPM needs, be aware – the more customization and automation you add, the higher the implementation cost.

You may also want to research how easy the tool is to learn from a configuration standpoint. This way, you can understand the administrative overhead required to enhance those configurations later on, whether it be the supplier, partner or even your own team.

Unique Use Cases

If each use case (additional department) you add is completely unique, estimate another +50% to +100% for each additional department you onboard.

Another possible significant impact on implementation costs are the number of unique use cases, or unique team processes, that are joining the tool.

For example, the configuration and onboarding effort may not be appreciably different if you have one common way of working for 100 people or 1,000 people. But, if you have five departments that each have their own unique project lifecycle, financial or resource management processes, that can be 5x more work to implement because it acts as if you’re really onboarding five different organizations.

This is why, implementing a PPM tool is a great excuse to apply some standardization across the organization. Even streamlining simple things like common project KPI tracking, status reporting templates or reporting can not only reduce the cost of your implementation but also provide value to the organization through standardization.

Pro Tip

If it’s not possible to standardize, then you can improve your implementation success by onboarding one business unit at a time. This gives you a chance to learn lessons from each successive department’s onboarding.

Support approach and involvement

Ongoing support and enhancements can be a likely impact to your implementation cost as you decide how involved you want your team to be. Most PPM tools provide various training mediums for project team members to learn system administration and configuration. This will allow you to successfully own the system and configuration after implementation. Some providers will even encourage an “enablement” approach during onboarding, allowing your team members to be hands-on during implementation, potentially reducing some of costs by taking on the less technical aspects of onboarding. This includes UI clean-up and user permissions.

Of course, the more resources you dedicate to system implementation plus ongoing support, the lower your supplier implementation cost. However, this can impact your timeline. Keeping the pros and cons in mind, understand that it will be a better long-term investment but you have to have the resources available on your team to focus on learning these skills and be ready to invest in them.

At Kolme Group we care and want to help you get the best out of your PPM Tool. Join Kim Essendrup for a Free, 15-minute consultancy to discuss your
PPM Tool needs and best steps forward

The hidden PPM tool costs that will get you

Although the costs described above can have the biggest impact on your overall PPM implementation budget, there are areas that can take a surprising amount of effort by your supplier or your team and cost you more than planned.

Data Migration

Migrating mass amounts of data for historical or in-flight work can be surprisingly challenging and time consuming. Even if the data is quality (which usually isn’t the case) you’ll need to transform and import it, in order to make that legacy data coexist with new data. That’s a lot of work!

If possible, use your transition to a new PPM tool as an opportunity to start clean with new project templates, fresh budgets and data.

For example, if your organization uses Microsoft Project Pro to track project plans and your PPM tool allows you to import those plans, this does not mean you should. Your old plans are likely not consistent across all your projects or they have issues with the resource data lining up with your new, clean, PPM resource pool. Besides,  most PPM systems have richer metadata on their projects that your old MS Project plan will not. So, although it may be attractive to import all your current plans, you will likely find that it is not worth the effort and best to start off fresh.

Process Development

Attempt to document your processes (project lifecycle, budgeting, etc.) in advance. If you need help developing or improving your processes, your PPM implementation partner should be able to provide assistance on best practices. Keep in mind, this type of consulting can add up quickly and deduct from your planned implementation budget. Be prepared with your processes, documented and ready to go, or with the expectation that you will need to invest in expert assistance improving your ways of working at the same time you implement your toolset.

Operational Costs

Likely, you will need to dedicate an amount of resources to administration, training, and maintenance of your new system. We typically advise to invest some amount of resource time to learn the configuration side. This way you can make configuration changes, develop reports, etc., rather than always relying on an outside partner. This is promising, but you will need to allocate ongoing resource time for these activities.

RoleKey Responsibilities Commitment (% of Time)
Executive SponsorProvide Overall PPM Implementation Goals and Objectives. Provides support for escalations.5%
Implementation & Product OwnerDay to day functional owner. Identify implementation team members. Provide clarity on user stories. Handles day to day analysis, questions and issue resolution. Ensures successful roll-out and user adoption. 25-50%
Implementation Project Manager Manage Implementation Team Members. Schedules and assists with discovery, requirements gathering, UAT, and training sessions.25-50%
Administrators Configure user interface (view, profiles). Configure reports and dashboards. Manage users and permissions. Assist with data loading of historical data. Configure and modifies business process rules. Provide technical assistance and support for integrations. Provides Tier 2 Support Participates in End-User Training25-50%

Support Costs

Be aware – different PPM providers approach and price support in different ways. Key areas to watch for are:

  • What are the support plans available, what SLA do they provide, and which one matches the criticality of this system in my environment?
  • Is administrative / configuration training free or cost money? Are vouchers available for signing up to different support levels?
  • Do I pay more for staging or development environments? Any required workflow or configuration tools? Or are those included?

Training Costs

Another cost that can be surprising is end-user training cost –  both in the time needed to train and producing the supporting documents. Because PPM tools are often configured to support your specific project delivery processes, you will need to develop end-user training specific to each persona in your organization.

Your PPM supplier may have a standard deck to get you started but you will also want to highlight areas the tool has been configured beyond out-of-the-box and tailored for that persona’s specific business processes.

This cost may or may not be included in the PPM implementation costs and when it is, it can be significant. To save cost, you can:

    • Go with a ‘train-the-trainer’ approach, where the suppler trains your power users or trainers, who then go on to train all your end-users.
    • Develop the training in-house. This can save a lot but requires you have involved team members in the implementation – enough so they can develop the material.
    • Lastly , you can record the trainings and making it part of the onboarding for new hires or for those that desire an On Demand option.

How do I keep PPM tool costs down and maximize return?

Kolme has implemented PPM tools for many clients and based on our experience, we wanted to share the following tips with you, as you prepare get to start, or re-engage, your PPM journey:

  • Moderate your expectations, simplify your needs

    Yes, it is exciting, but our main advice is to be pragmatic and temper your expectations. PPM tools can adapt to your organization, but they are only tools and won’t solve all your problems. If anything, they will help identify the problems in your organization.

  • Own It!

    Get involved, learn the tool and be active during the implementation. Start by documenting your own processes and invest in training your own people so they can be part of the solution, if possible.

  • Use An Agile Approach

    Start with a “Minimum Lovable Product.” If you try to implement too many features at one time you will fail. For example, if you roll out 50 features to users, they will be overwhelmed and will probably adopt none. Better to start simple and implement 5 high-value features until adopted, then gradually add layers of features after that.

  • Invest in Organizational Change Management (OCM)

    Use OCM strategies for long-term success. Even the best tool in the world is not going to succeed if nobody uses it, so look into tools and techniques like Prosci© ADKAR model for managing change and helping users adopt the new system and the processes attached.

Is a PPM worth it?

A PPM tool can undeniably be a worthy investment. Even with costs involved, and some not insignificant, we still advise on having one.

As a former PMO lead for a professional services organization, I implemented a PPM tool and that Organization’s billable utilization improved by more than 20%! The next time I implemented a PPM tool for an organization, we identified and corrected erroneous CAPEX allocation of labor cost which was amounted to 30-40% of all project labor. With another client, we found that 75% of their projects did not align to their strategic objectives. And with another, we managed to save nearly a million dollars’ worth of resource effort through automation and streamlining of processes.

So, based on our personal experience implementing these tools for ourselves – and for our clients – it is definitely worth it.

 

What’s next?

If you are ready to go shopping for PPM tools, or revisit your existing implementation, here are a few next steps:

  • Build Your Stakeholder Coalition

  • Justify the Return on a PPM Investment

  • Identify Your Requirements

  • Document a Proposal for Development and Evaluation

At Kolme Group we care and want to help you get the best out of your PPM Tool. Join Kim Essendrup for a Free, 15-minute consultancy to discuss your
PPM Tool needs and best steps forward

 

Powerful Timephase Functionality In Clarizen

Powerful Timephase Functionality In Clarizen

Clarizen just released some amazing new functionality for their Clarizen One platform which opens the door to some really powerful financial functionality.  We’re going to teach you a solution that uses a custom Invoices Module to track actual costs to your project – and integrates that into your projects’ timephase financials using this new Clarizen feature.

Watch our short video to walk you through setting this up! 

As with all of our expert advice, these tips will save you and your team a lot of time inside your system! As a premier implementation partner for Clarizen, our favorite PPM tool, we wanted to ensure our Admin Users had these handy tips available to them.

Life Without Timephase Data

The new financial functionality lets you integrate just about ANY object in the system into your Project Financials. Although, this functionality was technical possible before, it required a LOT of custom Powerful Timephase Functionality In Clarizenconfiguration. 

Note! If you are not familiar with Clarizen financial planning and timephase data, please visit this Clarizen Success article to learn more prior to reading on. 

Looking at project management from a very basic point of view, I have a project with tasks. Each task has so many hours of work on it. I multiply the work by some hourly cost rate for a resource, and there are my costs for the project.  

The Problem

The PROBLEM with this is that it’s only summary data. I’m given the planned and actual cost/revenue for the entire project but I have no idea what my month-to-month cost or revenue is?  

This is also really important for managing progress and cash flow. I can show that I’m currently 50% under budget. That’s good, right? 

But what if I’m 50% under budget – and I’m only 10% of the way through the project? Well, that’s NOT GOOD! 

The Solution

So, what we NEED is an easy way to look at the costs in a Timephase way. Watch our short video to walk you through setting this up!

What is my planned and actual cost (or revenue) by month AND for the entire project?  This lets me manage cash flow AND understand when things are starting to go off track. To do this, Clarizen offers Timephase Financials. In this concept, each time period is broken out by day, and we calculate resource for each period. 

Further, I can add any number of what Clarizen calls “Non-Labor Resources”. Powerful Timephase Functionality In ClarizenThese are containers for categories of costs. Typically, these will align with how your finance department needs to see project costs broken out. 

The limit we have is that I have to manually enter items. But what if I could say, import 1000 invoices each month and have them automatically link to their respective project and impact their Actual Cost?

Click Here to watch the Mini-Masterclass on our YouTube channel to walk you through all the steps.

Where Can You Use This Inside Clarizen? 

  • Purchase Orders – for planned cost, then use invoices for actuals
  • Change Requests – you can use Clarizen’s native request object and link those to timephase financials, maybe add fields for requested, authorized, actual…
  • Financial forecasting – put really complex financial calculations on the object
  • You can also make this bi-directional. You can use Clarizen functions to query data from your financials, perform calculations, then push updated data back into the financials table.  

Prerequisites

Environment

  • Sandbox  
  • Administrative access  
  • System Setting 9.6 Enable Financial Planning enabled – Click here

Technical Skills

  • Completed Clarizen admin training 
  • Creating custom fields 
  • Basic workflow creation 
  • Basic profile management 
  • Create NLR 
  • Understand the concept of timephase financialsClick here

Watch The Expert + Build Like Us

Join Kolme University instructor Kim Essendrup as he walks you through adding a customized invoice Powerful Timephase Functionality In Clarizenmodule to track project costs using a custom object, and link them to Project time period financials using Clarizen’s powerful new “Set Financial Timephase Data” action!

Watch Here on our YouTube Channel! We offer a FREE worksheet available for download as an easy reminder while your in your system.

Need More Clarizen Support?

Contact Kolme Group to find out more about our Project Management Services, please email us at PPManswers@KolmeGroup.com

Be sure to follow us on TwitterLinkedIn and YouTube and use #KolmeGroup on your shared posts!

Do I Need A PMO?

To PMO Or Not To PMO? 

Of the many questions our team gets around portfolio management, PPM tools, and PMOs, probably the most important one of all is, “Do I need a PMO?”

The reason it is so important is that if you don’t have a good answer at the ready, then your portfolio, potential PMO, and future projects are all at risk.

At Kolme Group, my partners and I all started off as project managers and then worked our way into building, managing, assessing, and fixing PMOs. We work with PMOs across many industries every day to help them run more efficiently and provide more value to their organizations.

So when we hear the question, “Do I need a PMO?” we have a ready answer.

The Wrong Way To Think About PMO 

The “old school” way to think about PMOs is that they are simply a team of project managers that enforce process and governance to make sure projects are done “right.” Do I Need A PMO?

This perception comes from project managers’ natural tendency toward organization, structure, and processes. This often expresses itself in PMOs that focus more on adherence to process than on delivering value.

Such organizations become more “Project Management Obstruction” PMOs rather than organizational enablers.

The New Reality Of Execution 

Not only is it more important to focus on value than process, but the very concept of a common delivery process across an organization is becoming obsolete.

At least 71%, and maybe as many as 97% of organizations have implemented some form of Agile, an approach which champions team-level self-organization and, as the name implies, a propensity for flexibility.

This often means devising unique ways of working for each team. While there is ample evidence that self-organized Agile teams are more productive at the team level, this can lead to chaos when trying to execute initiatives that span multiple teams, each working in their own way.

This is the new reality of project execution – each team may have its own methodology, or no methodology, and the PMO needs to coordinate across these teams in order to deliver enterprise-wide initiatives.

So, the modern PMO’s mission is more about finding ways to orchestrate execution in a heterogeneous environment than trying to impose some kind of artificial homogeneous process across the organization.

The Right Way To Think About PMO 

The purpose of a PMO should be defined the same way we define the purpose of an individual project. A project’s purpose is to deliver value to its stakeholders. And a PMO should strive to deliver value to the organization.

The value provided by a PMO can take different forms depending on the organization’s needs, and it will evolve and change as the organization changes.

To do this, the PMO should always strive to be entrepreneurial in its leadership and engagement with the organization.

In fact, one of our partners hosted an informative podcast with a popular speaker on this very topic, which you can find here: Entrepreneurial Project Management with Rolondo Talbott

PMO value categories 

When it comes to the specific value provided by a PMO, we find that it falls into three general categories: Accountability, Transparency, and Alignment.

PMOs typically provide value across some mix of these categories. When thinking of your existing or potential PMO, it can be a useful exercise to work with your stakeholders to “put a pin” in the diagram below where you need the most help.

Do I Need A PMO?

 Accountability 

PMOs oriented toward Accountability often serve as a point of responsibility to the executive suite for execution. Focus areas for Accountability oriented PMOs may include:

  • Responsibility for executing key strategic initiatives
  • Financial accountability and reporting for the portfolio
  • For Professional Services organizations, engagement profitability and customer satisfaction
  • Regulatory compliance

When we talk with executives that need an Accountability-focused PMO, we listen for key phrases like, “I need someone I can trust / count-on to get our initiatives done,” or, “How do I make sure I get the value I expected from my CapEx budget,” or, “How do we enforce regulatory compliance?”

Transparency 

PMO’s oriented toward Transparency focus on communication and information flow for projects and initiatives.

The goal is most often to help minimize the surprises that come from project risks and issues, and to enable the organization to be more proactive it its management of risk and change. Focus areas of transparency typically include:

  • Risk and issue reporting and change management
  • Resource management and planning
  • Common reporting across the portfolio to identify projects that are at risk or in trouble

When we talk with executives in organizations that need a Transparency-focused PMO, we often hear key phrases like, “I know my people are busy, but I don’t know what they are doing,” or, “We are tired of all the surprises and firefighting.”

Alignment 

PMOs that focus on alignment help ensure the organization’s strategic initiatives are prioritized within the portfolio and among all the other organizational activities.

It is important to note that when a PMO takes this role, it does not absolve individual teams from accountability for delivering on their team-specific initiatives. However, the most transformative and valuable changes are typically those that must span different parts of an organization, so a PMO that can manage alignment across different teams is key to success.

Focus areas for Alignment-oriented PMOs typically include:

  • Mapping and tracking projects to strategic organizational goals and objectives
  • Project intake, prioritization, and selection
  • Stage-gate controls and release management

When we talk with executives in organizations that need an Alignment-focused PMO, the most frequent comments we hear are, “We spend all this money, time, and effort on projects, but our strategic initiatives never seem to get done,” or, “We find ourselves struggling to complete projects that we should have just terminated long ago.”

Transformation, too! 

There is a special ‘superclass’ of PMOs we often see that encompass all three of the above value types  the Transformation PMO. These organizations can be temporary in nature and are implemented to drive a specific and often radical organizational transformation. Typical transformations that use this kind of PMO include:

  • Mergers and Acquisitions
  • Agile transformations
  • Creating a new line of business

 

Think In Terms Of The Value Transaction 

When thinking about the value a PMO can provide to your organization, it can be helpful to map it out using a value transaction or spider diagram. This is a great tool to identify not just the value the PMO provides to different parts of the organization, but the level of commitment the PMO needs in return to deliver that value.

This diagram can be a great collaborative brainstorming tool to use with your PMO stakeholders. It’s also a helpful communication tool to use with your executive team.

The example below is a very high level one – you will likely have more than the four teams shown in the example, and many, many more items in your value transaction tables.

 Do I Need A PMO?

Figure 1 – Example of a highly simplified Value Transaction (spider) diagram 

 

When A PMO Is Not The Right Way To Go

Put simply, if you cannot define the value a PMO would give to your organization, then don’t create one. This doesn’t mean that a PMO cannot give you value, but if your team cannot identify how it would do that, then it won’t succeed in the face of any resistance.

Another contraindication for a PMO occurs when the value you do identify isn’t strong enough to get vested interest and sponsorship from your leadership team.

If they’re not buying what you’re selling, your PMO won’t survive for long.

 

What If We Go “Agile” – Why Would We Need A PMO? 

PMOs are easy targets to catch blame for project delivery issues. That blame then often extends to the whole discipline of Project Management, which can then make organizations think, “I’ll just go Agile and everything will be better.”  

The reality is that standing up a dedicated team to drive project delivery (i.e. a PMO) is a LOT easier than completely transforming an entire organization to an Agile framework. And if you cannot successfully create and operate a PMO, then you will likely fare worse when restructuring the entire organization.

Keep in mind that organizational agility isn’t just about doing “Agile.” 94% of highly agile organizations report having a PMO or similar project governance team.

And if you are going to start an Agile journey, organizing a Transformation PMO to drive that change can be a lot more cost effective than bringing in a busload of “Big 3” consultants to do it for you.       

How Do We Start? 

If you think a PMO is for you, our recommendation is to start by having conversations within your leadership team about the potential value you might get from a PMO.

Map out your value transactions using a visual aid such as the spider diagram above –  DOWNLOAD YOUR FREE WORKSHEET TEMPLATE – complete the quick form below! 

Once you have organizational alignment on the value transactions for your proposed PMO, the next step is to start planning what the PMO should look like from an org structure, reporting, and measurement perspective.

To help you with this process or for support assessing the value a PMO can give to your organization, please Contact Us and we’ll reach out to you shortly.