How to identify the project management measures that matter

Conventional metrics that assess PMOs based on delivery and cost are insufficient to fully capture the value they bring to organisations.

Where conventional measures fall short in capturing a PMO’s value

Measuring the performance of a Project Management Office (PMO) and using the subsequent information to demonstrate value for money is a challenging, yet critical, exercise. Typically, PMOs measure performance by utilising the “Iron Triangle,” which considers whether work was completed on time, within scope and on budget. While such fundamental measures are key to meeting the expectations of project sponsors, they do not capture the additional value that PMOs bring to the project and wider organisation. 

Whether by building project management capacity within an organisation or bridging the gap between organisational strategy and execution, the value PMOs create is difficult to capture in formal quantitative assessments that leverage a temporal perspective. Such difficulties led us to question: What, exactly, are the measures that best demonstrate the value PMOs bring to organisations? To answer this question, we spoke with senior project professionals and transformation leaders across the Middle East to gather their insights.

A PMO’s value depends on the particular project and organisation

It was clear from our conversations with such leaders that standard metrics are ineffective and insufficient in capturing a PMO’s true value. The reality is more complex and key benefits derived from PMOs often vary from organisation to organisation with PMOs typically operating to fulfil specific distinctive needs. Despite this complexity, according to leaders, it remains crucial that PMOs are not relegated to the background; rather, specific and easy to digest metrics measuring ongoing performance can be developed on an organisation-to-organisation basis. To develop these metrics, a strong business case capable of answering the key following questions among others based on relevance can be constructed:

• What measures are best-suited to capture our impact?

• Do we have the appropriate talent in place?

• How can we ensure alignment between the project and the business strategy by supporting governance throughout the project’s lifecycle?

Capable of answering these questions, a strong business case offers PMOs specific, measurable KPIs with clearly defined outcomes. With the KPIs, a talented team, and a robust methodology, PMOs can develop a tailored framework that tracks both the success of the project and the holistic impact it has on the wider organisation. In doing so, the PMO ultimately enhances the visibility of a project's leadership throughout its lifecycle, improving decision making and risk management as a result. Most importantly, it can fully capture the value it adds to an organisation, beyond the boundaries of the “Iron Triangle.”

Snapshot: Benefits that PMOs can offer organisations

Through our conversations, we gathered examples of ways in which PMOs add value at the organisational and senior leadership levels. As an example, long term capacity building was frequently cited as a key benefit that PMOs offer to organisations. After the conclusion of a project, leaders advised, the impact and key lessons learned can be evaluated by the PMO and shared across different functions. This allows the organisation to refine methodologies and processes, and in the process, upskill team members while building expertise and best practices. The ideal end-result of the capacity building is creating an organisation with a culture of knowledge sharing that has a connected network of project-oriented personnel in various departments capable of sharing insights and experiences.

PMOs were also often described as safety nets, protecting long term investments through the early detection of risks throughout a project’s lifecycle and the development of appropriate mitigation plans accordingly. They also provide a holistic view of risk across an organisation’s portfolio to enhance strategic thinking and decision making. A key goal of project management, risk management on an organisational level allows decision makers to identify previously unnoticed opportunities as well.

Why the metrics that matter, matter

There is no doubt that a PMO is a worthwhile investment, however it is necessary that the right questions are asked to develop the metrics that demonstrate this value to senior leadership. Without metrics that move past considerations of cost and time, accurate and formal evaluations of PMOs are not possible, thus eliminating opportunities for improvements in other areas.  The Strategy and Innovation Leader of the Government and Public Sector of Saudi Arabia explained “Measures can sometimes become a simple checklist, not concerned with longer term, qualitative benefits. They are looking at it in terms of deliverables base, that’s all – but it shouldn’t be a simple checklist. It’s about the quality of the deliverable and the value that I’m getting out of the deliverable to my own objectives and goals within the organisation.” In short, adopting an agile approach to measuring impact allows PMOs to clearly track their success within a project and as they relate to the organisations they are supporting. By doing so, PMOs create opportunities for capacity building, identification of opportunities, and strategic alignment at the organisational level while clearly demonstrating their value in quantifiable, digestible, and relevant measures.

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