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Improve Your PMO Metrics

Improve your PMO Metrics

Improve your PMO Metrics In an ideal world, a functional PMO is a joy to run. Projects get delivered on time and within budget; Executives have an accurate view of their project initiatives; and the PMO Manager operates with their finger on the everyday pulse of delivery. If you are fortunate enough to be one of the lucky few who run such a PMO then read no further. What follows, for the rest of us, are a few focus areas that you can use to improve the performance of your PMO metrics toward that next level.  These are not project metrics, but rather metrics for the whole PMO. The data, managed by the metrics described below, is the heartbeat of the PMO. An accurate, timely view of the entire portfolio provides the control you need to manage effectively.

Twelve Kinds of PMO Metric

The Forward Pipeline of Projects is a register of all projects being considered by the business. This is the place to consider each project’s strategic alignment and priority to the business. In commercially focussed organisations this may take the form of a sales funnel where projects must be qualified to progress. The forward pipeline is where initial prioritisation occurs.

The Active Pipeline represents all work in progress.  It may form the basis of a progress report, so it is worth considering how much detail needs to you need to keep on each project.

Functional Performance metrics measure how well the PMO does things internally. They are easily quantifiable and allow the PMO to demonstrate performance over time. As an example, consider tracking how accurate project manager estimates of time and budget are. Over time, performance trends can be identified at both project and portfolio levels. Another common approach is to track the percentage of resource utilization to illustrate how well the team is being used. Some PMOs track the quality and punctuality of project reports. These are indirect project hygiene metrics that track project manager engagement.

Process Flow metrics can be built on top of functional performance metrics to measure how long specific types of project take to go through stages of the methodology. Paying consideration these PMO Metrics can highlight specific stage issues such as when initiation takes too long.

A Consolidated Resource Schedule allows you to perform capacity planning if you manage internal resources across multiple projects. If managed well, this can prevent resource contention from causing project delays. Key metrics to measure here are the percentage resource utilisation and the overall staffing level.

Timesheets metrics not only track effort on projects but can also provide insight into the accuracy of estimation processes if they are matched to the predictions of the overall resource schedule.

Consolidated Budgets have value if the PMO operates under a profit-and-loss arrangement. This combines profit and loss from individual projects. It may also consider the cost to the organisation of having idle resources that have not been assigned to projects.

Business Value metrics are measures of whether the PMO is doing the right work. This includes metrics such as Project Return on Investment, Project Breakeven and Benefits Realised. In government and Not-For-Profit environments where profit is not a consideration, metrics can be based on marginal utility and allocative efficiency.

Earned Value Management, when applied to an entire portfolio, allows a PMO to track the value of execution against the business strategy. Solid EVM management allows the PMO to assess the mission criticality of funding flows towards late projects.

Service Level metrics illustrate how well the business perceives the PMO to be delivering value. These metrics are more subjective in nature and as such it is movement between measures that is important rather than absolute value. Typical metrics include: Customer Satisfaction, Time to Complete Projects, and Responsiveness in time to get a project started. More sophisticated PMOs may implement Net Promoter Scores.

Defect Related metrics are used by PMOs where projects build outcomes to a quality standard. The two considerations here are the cost of preventing defects in the first place versus the cost of rectifying defects later.

A Closed Projects Register provides a repository of all previous projects as a source of lessons learned and benchmarks for benefits realisation if that is part of the PMO brief. This is left as a historical record of previous actions and their consequences.

Implementing New PMO Metrics

The implementation of any new metric is a change for the organisation that may affect both the project managers producing the data as well as executives that use the summary information. Frequently the exercise of implementing new metrics accompanies a PMO Capability Maturity assessment. Measuring the right metrics may become a priority if they help to improve maturity ratings. Bearing this in mind, it is advisable to treat each new metric as a change initiative with appropriate communication and rollout planning.

There are elegant software suites capable of providing these functions. However, such tools can be costly. There is much to be said for the humble spreadsheet if your budget does not stretch so far. However, spreadsheets can be resource intensive. It is best to carry out a cost benefit analysis before deciding to commit to either path.

If your PMO needs assistance in using metrics to move to the next level of capability maturity, contact MagniStrat to learn how our experience and expertise may help you.