A project management Office is a department, agency or group that is found within an organization or business whose sole purpose is to define and maintain standards related to project management within the organization. It is a body that is actively involved in directing and controlling project management activities in a standardized manner. It is the main source of guidance, documentation, and metrics used within an organization in project management activities and execution. There are different types of PMOs depending on the organizations or businesses in which they are found. They do exhibit different types of implementation ad execution techniques which define their success rate. There is a reduced rate of success in organizations where project management is not highly regarded. This calls for a total inclusion of PMOs in the overall activities of an organization if they have to run successful projects and programs of an organization.
There is, therefore, need for PMOs to evolve to become successful. This is because it is only the high performing PMOs that add value and improve profitability to their respective organizations. However, some PMOs are easily aligned with an organization’s strategy as compared with others. The primary factor is whether or not the PMO the attitude of people towards the PMO is negative or positive or if it reports directly to strategic and influential people. Strategic PMOs are known to be high performing because they give regular reports and feedback which helps them to improve their approach. These are the PMOs that influence strategy implementation in organizations. This is because they are more project specific and enjoy a lot of support and resources to carry out their main roles (Project Management Institute, 2013).
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Strategy is crucial in any business undertaking. It is because of strategy that companies can be able to maintain their business success for a long time. Examples of such companies include Google, Samsung, Apple, Disney and many others. Strategy is an effective way that gives a company some competitive advantage over its rivals. A company therefore needs to a distinctive and creative strategy that distinguishes it from its competitors. These are moves that are aimed to appeal to its customers by competing differently with your rivals. There is a relationship between an organization's strategies with its business model. A company's strategy tries to devise an approach aimed and producing or offering superior value to its customers. On the other hand, there is the business model which is its management blueprint that is focused on delivering superior value in a way that will also generate an attractive profit.
A good strategy for a company is to offer an attractive value proposition to its customers while at the same time maintaining reasonable profits. It is in this respect that companies utilize their business models to craft effective strategies to generate profits. Any meaningful strategy should have the effect of creating a competitive advantage for the company. These might include a number of cost strategy which will have varying effects on the market with regard to competition. A company’s strategy needs to evolve over time because circumstances keep on changing always not mentioning the need for the companies to improve and refine its strategies with time. These might include shifting or changing needs of buyers, unexpected activities by competitors, and many other dynamics (Johnson, Christensen and Kagermann, 2008).
The management of a business enterprise depends on the creation and execution of strategy to stay afloat. There are different components involved in strategy formulation, execution and involvement of other personnel in its process. The management is left with the onerous task of charting the direction in which the strategy will take.
This can be done in a five way process in which the management first needs to evaluate and analyze both internal and external factors in order to make a strategic decision that will follow a certain direction. These decisions should factor in conditions such as the company's internal resources, the prevailing economic condition, and the competitive environment. The management needs to always evaluate the organization's performance as they move along. This will help it to develop new tactics when they notice shortcomings. The second set involves setting the goals and objectives that the company needs to achieve. This will then lead to crafting an effective strategy that is in line with the set objectives. Finally, the company moves to the last stage which involves the execution of such a strategy (Gamble, Peteraf and Thompson, 2018).
PMOs are actively involved in setting the pace for an organization's strategic activities. However, recent research has indicated that PMOs are having a difficult time in defining their primary roles in organizations including the ability to show their value. Their roles are seen as ambiguous which mainly limits their effectiveness. However, not all PMOs are similar because they tend to have different structures which implement strategies in a number of different ways. However, there is no right or conventional model on how a PMO should be.
Strategy implementations of companies that spend less resources on PMO have reduced rates of success compared to those that do. It is important to note that the management of those companies should align themselves to the functions of PMOs to help them have successful projects. A company's strategy need to incorporate the functions of PMOs in their activities to make them more effective and improve their profitability. This will make them have value proposition for their customers without necessarily affecting their productivity. Management needs to evaluate both internal and external factors to help it apportion its resources to the most productive areas formulating and executing its strategies. By isolating the functions of PMOs, a company will not be as effective in meeting the needs of its customers and this will not augur well with its profitability. Companies vary in the way they set up their goals and objectives which are used to formulate strategies. It is, therefore, important to incorporate PMO into these initiatives for projects to achieve effectiveness. PMOs have the ability to create completive advantage to a company by distinguishing it from companies that formulate their strategies in a different manner.
Research indicates that about 54% of organizations make use of PMO units. The size of these units needs to be structured based on the needs of the business. This is to say that, the formulation of business strategies needs to fit with the needs and management maturity of the respective organizations. The main point here is that organizations need to align their PMO initiatives with their objectives and goals. By embracing key capabilities such organizations are able to deliver successful strategies which consequently create more value for those organizations. This makes them to have high performance rates which ultimately lead to competitiveness which have a positive impact on their financial performance.
For PMO units to be successful they need full cooperation from top management who have the power of influencing strategy. This will then lead to an alignment of an organization's strategies to PMO and vice versa. The impact of PMO on strategy implementation cannot be overemphasized because of its great influence on positive results. Organizations have business models that define their strategies for business success. However, top managers need to take cognizance of the fact that for such organization to meet the needs of their customers, improve their value proposition and have a competitive advantage over their competitors, they need to incorporate PMO into their strategy formulation process. Many organizations usually focus on the cost factor while ignoring other components of effective strategy formulation. This type of approach can lead to reduced rates of profitability which can be occasioned by failing to meet the needs of their customers and also lowering the company’s value proposition.
It is therefore, advisable that management should take an active role in encouraging the development of PMO units within their organization and offering them the necessary support and resources to help them actively engage in the development. PMO units need to be given access to top management and left to work independently without being undervalued. Aligning them to the organization’s implementation strategy and greatly enhance the chances of an organization in improving its value and meeting the needs of its customers (Forrester Research, 2011).
However, some organizations usually put much emphasis on the cost factor which does not always work for most of them. Some of them peg their pricing based on that of the competitor or apply the same strategies. This is not an effective way of strategy formulation because it does not distinguish the company from its competitor. It is barley an imitative approach that has high chances of reducing value proposition and eventual loss. The best approach is to engage all the components of strategy implementation to increase the chances of the company to achieve financial success. PMOs which perform highly are interconnected with other areas of an organization to ensure that they are consistent and have the ability to deliver the goals and objectives of the company. These PMOs are in constant consultation with top management on matters such a risk assessment, performance reporting and management, and assessments of KIPs financial management. These roles make PMOs to enhance value and promote transparency in such organizations.
References
Forrester Research. (2011). Are You Ready to Transform Your PMO? Retrieved from https://www.forrester.com/report/Are+You+Ready+To+Transform+Your+PMO/-/E-RES58510#
Gamble, J.E., Peteraf, M.A., and Thompson A. (2018). Essentials of Strategic Management: The Quest for Competitive Advantage . 6 th Ed. New York: Mc Graw Hill Education.
Johnson, M.W., Christensen, C.M., and Kagermann, H. (2008). Reinventing Your Business Model. Harvard Business Review 86, no. 12.
Project Management Institute. (2013). The Impact of PMO’s on Strategy Implementation. Newton Square: Global Operations Center
