Given that many executives today view their company as a stream of projects, the project management approach permeates the entire organization, mandating that maturity is necessary. So, only those companies that want to stay in business and remain competitive should pursue maturity. The alternative is rather unpleasant.– Harold Kerzner, Ph.D.
As healthcare organizations continue to define and adjust to the new normal in the aftermath of the pandemic, organizations are experiencing even greater pressure to deliver projects with higher quality than ever before. To meet these increasing demands, healthcare organizations need to recognize the need for an effective Project Management Office (PMO), with the intent to have dedicated resources, processes, and tools in place to facilitate and improve the delivery of large, complex, and strategically important IT and business-focused initiatives. While the specific type and role of the PMO can vary by organization, the primary objective is the same; The PMO should add value to the organization and deliver on strategy by ensuring that projects are completed on time, within budget, and adhere to the intended scope of work.
Healthcare PMO functions have historically been focused very narrowly on the delivery of projects. Rarely are they brought into strategic discussions with IT and other business leaders during the planning stages, and instead the PM is handed a list of projects they need to implement. When the delivery process breaks down, the PMO takes the blame. PMO leaders then react with repeated efforts of maturing processes, tools, and templates, which may or may not fix the underlying issues. These efforts typically result in a more bureaucratic process and a heavier workload for project management resources.
Healthcare organizations looking to mature PMO operations should take a larger view of project operations. PMOs must be seen as an integral part of an organization’s operations and not just as a delivery arm. They need to be engaged early in planning, have project delivery excellence, and be able to communicate the value they add, which will help communicate their role in the organization.
To do this, PMOs should focus their maturity efforts within four distinct areas:
- Operating Model – Includes the organizational structure, roles and responsibilities, resourcing, communications, and compliance efforts.
- Governance & Strategy – Includes the intake, assessment, strategic alignment, approval, prioritization, and overall portfolio management of projects to achieve the desired corporate strategy.
- Project Delivery – Includes the processes, tools, and templates needed to deliver strategic projects.
- Value Realization & Customer Satisfaction – Includes defining, measuring, and reporting the benefits achieved and providing formal tracking and continuous improvement activities collected from stakeholder feedback.
PMOs should develop a structured approach to maturing in these areas, aligning industry standards and best practices with existing corporate culture and policies to provide “just enough” management and oversight to add the intended value to the organization while not overburdening existing delivery operations.
What is PMO Maturity?
The definition of PMO maturity can vary widely by industry, within a single industry, within an organization, and even within a PMO itself, depending upon the structure, role, and experience of the organization and the resources involved.
In general, project management maturity is often defined as an organization’s ability to deliver desired project outcomes consistently in a predictable, controllable, and reliable manner.
This typically includes standard project delivery operations for healthcare PMOs such as Portfolio Management, Program Management, and Project Management. Still, as mentioned, it is usually limited to the processes, tools, templates, procedures, and resources needed to deliver an approved project. It rarely includes front-end governance and end-stage value realization components.
Why Does a PMO Need to Mature?
As the Project Management Institute’s “Pulse of the Profession” (2020) outlined, mature PMOs outperform organizations with lower maturity.
The PMI survey, conducted in 2020, revealed that an average of 11.4 percent of investment is wasted due to poor project performance. In addition, organizations that undervalue project management as a strategic competency report an average of 67 percent more of their projects fail.
As resources and operating income become more scarce and organizations are forced to respond quickly to issues such as the COVID-19 pandemic, it is increasingly vital for PMOs to have the infrastructure to quickly pivot and adapt to changing business needs and priorities. Adopting and maturing practices that enable agility and provide results for the organization will ensure the PMO is positioned to deliver organizational value.
What Does Maturing the PMO Mean?
To mature, the PMO leader should focus on maturing its capabilities and services needed to deliver desired project outcomes.
The Project Management Institute (PMI) provides extensive literature on the various functions found within project management operations, including:
- Portfolio Management
- Program Management
- Project Management
- PMO Process, Tools, and Template Standards
Maturity efforts can be focused within a specific functional area or, more broadly, across many functional areas within the PMO. One way to start is to select one or a few small initiatives to achieve quick wins. After successful implementation of an initiative, PMOs can gain confidence and experience to move forward with larger, more complex efforts that add more value to the organization.
Maturing PMO capabilities in these areas are essential, but those efforts do not always address fundamental problems that healthcare PMOs face. Recently, more efforts are directed to maturing operations outside standard PMO functions. The most important of these efforts have been directed at improving executive-level governance. These efforts require resources outside the PMO to enable the PMO to successfully deliver value. Governance often includes:
- Executive engagement and support
- Alignment of strategic initiatives and projects
- Organizational project prioritization
- Resolution of competing project priorities
- Project sequencing and scheduling of projects
- Resource allocation and utilization (PMO and business/IT)
- Projecting funding
Effective governance is integral to a mature PMO. Without governance, a PMO can focus on maturing processes and tools within the PMO. However, the ultimate success of the PMO is dependent on integration with other areas of the organization that governance can facilitate.
When is a PMO Mature?
While there are many published versions of maturity models, the Project Management Institute publishes the Standard for Organizational Project Management (OPM), which provides general definitions that can be applied to any PMO organization.
- Level I (Initial or ad-hoc): Performance is not reliably predictable. Reactive instead of proactive. Highly dependent on the experience and competency of the people performing the work. Projects are completed but are often delayed, over budget, and quality varies.
- Level II (Project-level adoption of standards): Projects are planned, performed, monitored, and controlled at the project or functional level following generally accepted practices. Processes and practices are not uniformly applied or managed from an organizational perspective and may vary from project to project. Functional departments may have institutionalized processes to guide work, but those processes may not be aligned with project operations.
- Level III (Organizationally defined standards): Project management is proactive, and organizational project performance is predictable. Project teams follow organizationally established processes tailored to the complexity of the projects and the competency of practitioners. Processes are organizationally standardized, measured, controlled, and can be analyzed by the organization to monitor and control process performance.
- Level IV (Quantitatively managed): Project management decisions and process management in the organization are data-driven. Process performance is managed in a manner that enables the achievement of quantitative improvement objectives. Process performance is systematically analyzed for improvement opportunities that add value to the organization.
- Level V (Optimized): The organization is stable and focused on continuous improvement. Projects are aligned to the organizational strategy, coupled with defined and measured processes, with a focus on value contribution, organizational agility, and innovation. The success rate of programs and projects is high, and the portfolio is optimized to ensure business value. Projects are selected for their impact on the strategy of the organization.
A direct cost/benefit relationship exists when PMO organizations begin to mature. Building relationships, processes, and tools take time and effort. As seen with the recent COVID-19 pandemic, the rate of change is increasing, and PMOs must be structured to adapt quickly to new business demands. To do so, the PMO needs to achieve higher levels of maturity.
Many healthcare IT organizations are at a Level III PMO. This level provides the basic structure needed to manage projects effectively and sufficient data for the organization to determine if additional improvements are required.
However, there are healthcare organization PMOs that are at a Level II. PMOs require continuous effort to achieve and maintain their maturity level. New methodologies and best practices change regularly. PMOs should stay abreast of industry trends and apply new techniques to remain relevant while maintaining their desired maturity level.
Organizations looking to improve beyond Level III will face challenges beyond the control of the PMO. While there may be financial benefits to doing so, the PMO must be prepared for pushback as it “projectizes” operations.
Organizations striving to mature their PMO should evaluate their current state as it relates to their operating model, governance & strategy, project delivery and value realization & customer satisfaction. After the current state is documented, the organization should define the desired future state in each area and develop a roadmap with milestones to achieve the new level of maturity. In conjunction with the roadmap, a stakeholder communication plan should be developed and executed. Checkpoints should be established at periodic intervals to evaluate progress and to adjust the roadmap as needed. Ultimately, the more mature a PMO, the higher value the PMO can deliver to the organization.