Forrester: Project managament offices on rise

Most companies have now established project management offices (PMO) to help them enforce standard IT processes during IT/business projects, according to a recently released report by Forrester Research Inc. But many PMOs continue to focus too much time on compiling reports for senior management and not enough on ensuring that projects are delivered on time and within scope.

That could explain why nearly one-fifth of all new IT project implementations are delivered three or more months late.

"It's no surprise that the presence of a PMO didn't have much effect on project failure rates," said Tom Pohlmann, an analyst at Cambridge, Mass.-based Forrester and the author of the report, "How Companies Govern Their IT Spending," published June 30. The study is based on telephone interviews with 704 North American IT decision-makers between late April and June.

Sixty-seven percent of the respondents said their organizations have one or more PMOs -- either inside or outside of the IT department. That's up from 53 percent last year. The problem, said Pohlmann, is that too many PMOs serve as "process cops and report compilers" for executive teams and often "lose sight of what they're supposed to be doing -- to make sure projects are running effectively."

Dan Garrow, senior vice president of information systems and CIO at Mohegan Sun, agreed with the report's findings. "We have a PMO which has frequently been referred to as the 'PMO Police,' " said Garrow. The IT department for the Uncasville, Conn.-based hotel and casino is "working hard to overcome that perception," in part by trying to enlist senior management support of PMO concepts.

In addition, IT departments have to be more rigid about which IT projects they're willing to take on, said Garrow. "IS departments are so ingrained with the idea of being a service organization that to say no to a customer is almost taboo," said Garrow. He advocated calling on executive management "to assist and, in many cases, say no on behalf of the IS function so they can maintain the customer relationship with user departments."

For purposes of this study, Forrester classified a project as a "failure" if it was delivered one to three months late and affected at least 3,000 end users. According to survey respondents, 19 percent of their enterprise application initiatives were delivered at least three months late, and another 17 percent were between one and three months overdue.

For his part, Pohlmann doesn't expect any dramatic improvements in IT project delivery rates because of what he attributes to IT management apathy. "I think there is improvement that can be achieved, but not from a project management methodology standpoint, because those have been around for years," said Pohlmann. Instead, he said business units have to remain much more involved with IT departments on project requirements throughout the entire life cycle of the project.

Don Christian, a partner at New York-based PricewaterhouseCoopers, believes that Forrester's decision to use a one- to three-month project delay as part of the criteria is too harsh. "Our experiences have found that one- to three-month delays on projects might be palatable if they end up meeting their original business benefits," he said.

However, Christian agreed with Pohlmann's assessment that PMOs tend to focus too much on reporting and administration. An effectively run PMO, said Christian, "needs to have a domain of expertise to evaluate not only what's going on with a particular project, but also to evaluate the market for insights into whether staff has the right skill sets to deliver projects, organizational behaviors, etc."

Scott Carcillo, vice president of enterprise IT services at Laurel, Md.-based hosted services provider Digex Inc., agreed that business alignment is central to the success of IT/business projects. However, if IT is talking about 'the business' and business people are talking about 'the IT project,' there's a disconnect, even if it's subtle," said Carcillo.

The most successful programs and projects he's been involved with "have had great business people and IT people working collaboratively to bring about change for an organization."

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