A survey shows that 86% of respondents using a project management office stated that the PMO leads to more successful projects. Another study shows that as the ability of a PMO improves, the performance of the organisation increases. And the list goes on... Measuring the effectiveness of a PMO is very important when setting up, implementing and staffing a project management office. You can achieve this by deploying PMO KPIs.
In the meantime, much has been said and written about the potential added value of a PMO in an organisation. And yet almost half of the PMOs are eventually dissolved. The question is whether this is the result of a proven malfunctioning PMO or a lack of measurable success factors?
Analyze your PMO!
Nowadays, we can assume that the PMO has become an equal part of the organisation. The fact that the merely subjective assessment of a PMO may come to an end is therefore obviously an understatement.
Can the PMO learn from itself?
It goes without saying that PMOs can apply their knowledge and skills to themselves in the first place. By analyzing with the help of measurement data, learning points emerge on which they can act immediately to improve. For example, the PMO can provide insight into the fact that an organisation's resources are currently still not perfectly mapped out. PMOs can act on this and make it clear where the problem lies. On the other hand, you also get confirmation for the things that are already going well, this ensures peace of mind and support for the PMO.
Common KPIs of a PMO
Whether a PMO takes matters into their own hands, or an external consultant takes on the analysis; a set of KPIs that can help measure a PMO's performance are always useful.
1. Improved project completion
The PMO is the eyes and ears of the project organisation for the project leader, the steering committee, the client and the MT. All these stakeholders must be able to assume that the information obtained from the PMO will enable them to make the right decisions.
Examples of KPIs for improved project completion are:
- Relationship between successfully completed projects and all projects in the portfolio (per period);
- Relationship between successful strategically important projects and all strategically important projects in the portfolio (per period)
- Relationship between successfully completed strategically important projects and all projects in portfolio (per period)
2. Faster time-to-market
The PMO's knowledge area helps in understanding the project activities and their sequences and then planning them correctly.
Examples of PMO KPIs for faster time-to-market are:
- The time elapsed between the conception of the project and the start of the project compared to previous years
- The time elapsed between the conception of the project and its completion compared to previous years
- Percentage of projects having the same progress over X reporting periods
3. Better project management
A great advantage for the project leader and Program Manager is that the services and reports are uniform and bear the quality stamp of the organisation. Their 'only' task is then to use these services and reports to give the project the right control measures.
Examples of PMO KPIs for better project management are:
- Elapsed time between the occurrence of anomalies, risks, conflicts and/or corrective measures
- Percentage of active projects without concluding a contract or placing an order
- Percentage of project status reports older than X days
- Relationship of projects with full documentation compared to projects without documentation
4. Better resource management
The PMO develops processes, methodologies and best practices for resource allocation.
Examples of KPIs for better resource management are:
- Relationship of internal Project Managers / specialists with externally recruited Project Managers / specialists
- Number of employees assigned to multiple projects at the same time
- Number of projects with resource conflicts compared to previous years
5. Better stakeholder satisfaction
By focusing on what makes the difference for the organisation and what can be seen to add value, PMO leaders can build commitment and support.
Examples of KPI's for better stakeholder satisfaction are:
- Average customer satisfaction compared to previous years
- Average satisfaction of project staff compared to previous years
6. Optimized finances
The PMO creates standardized project management processes that help the organisation achieve the project objectives. Employees monitor and report on the progress of each project so that each project meets its deadline and stays within budget.
Examples of KPIs for optimized finance are:
- Analysis of the annual ROI of all projects coordinated by the PMO
- Percentage of projects below agreed budget (compared to previous years)
7. Improved predictions
Based on data from previous projects, the PMO can provide a good picture of the course of future projects. Project Managers can adjust the route of the project accordingly and make interim adjustments where necessary.
Examples of KPIs for improved forecasting are:
- Ratio of estimated contract costs to actual costs
- Ratio between estimated project duration and actual duration
MOJEO & PMO
Within MOJEO we believe that with a well designed and functioning PMO you can make the difference within your project organisation. From setting up a PMO to the crew or taking a PMO Maturity Scan: we can support you on various fronts. Read all about this on our PMO page.
Relevant articles from this blog post: