Putting Project Profitability More Quickly Within Reach
Outsourced PMOs Are on the Rise
Companies of all sizes and industries have begun to realise the strategic advantages of a virtualised or outsourced “master office” that makes sense of all projects within a company and gives leadership a quick, clear view into all the company’s projects, how well they’re working, and how they impact the bottom line.
This is the outsourced Programme Management Office (PMO), and while its potential benefits are many, there is a wide range of success among companies that have attempted implementation. For companies whose projects suffer from resource drain, cost overruns and managerial chaos, the PMO provides the metrics, criteria, methodology and gate-keeping functions that drive better resource use, profitability and decision-making.
Companies are Turning to Outsourced PMOs
Originally conceived by large technology companies to help control project costs and execution across the organisation, PMOs are now employed by organisations of all sizes and industries. According to PM Solutions Research, today 87% of large companies have a PMO, and of those who don’t, 40% are looking to implement one within a year.
Outsourced PMOs Are on the RiseAs the above graphic illustrates, PMOs report an increased reliance on contracted resources, both for managing projects and programmes and for managing PMO operational functions. This is especially prevalent in healthcare, utilities, IT and large organisations spanning many industries.
Organisations that embrace outsourcing have found that internal implementation of a PMO is costly. Building the in-house expertise and implementing the technology required to achieve any benefit turns into expensive learning exercises that delay and often derail results. To meet these challenges, companies have turned to experienced PMO consultants who can quickly assess process and programme issues.
The goal of the outsourced PMO is to help companies improve the execution, and ultimately the profitability of company projects by establishing project execution and reporting standards to enable better decision-making. These initiatives may include staff utilisation, on-boarding and off-boarding employees and contractors, timesheet process management, expense management, project setup and monitoring.
PMO engagements can be very flexible, either perpetual or initiative-focused, and can vary in scope depending on the strategic needs of the company. In a subsequent post, we’ll explore some of the factors that separate success from failure for companies seeking to outsource their PMO.
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