BINUS Business School

How a Project Management Office Can Increase Project Value and Success Rate

PMO is not just an acronym for project management office as it can be used as an acronym for program management office and portfolio management office. In actuality, these three have the same responsibilities with different scopes, further proving the flexibility of PMO. According to the Project Management Institute (PMI), out of USD1 billion spent on a project, around USD135 million is at risk of project failure. That’s why we need PMO, as 70% of organizations have reported increased success rates due to having PMO, based on a survey from Gartner.

On 7 July, BINUS BUSINESS SCHOOL – International Undergraduate Program held a webinar to discuss ‘The Role of Project Management Office (PMO) in Managing Indonesian National Strategic Projects (PSN)’ brought by Adi Prasetyo, Meng(PM), PMP, PRINCE2, CPPD (Project Management Advisor of LRT JABODETABEK & KCJB Projects).

Benefits of Having PMO

Slowly but surely, the importance of PMO is starting to gain momentum. Even the government is satisfied with the benefits of having effective PMO in their National Strategic Projects (PSN). The government entrusts PMO to accelerate, improve, and standardize all projects. However, there is still a lot of skepticism on what PMO can actually do to bring added value and increased success rate to projects.

“PMOs can be supportive, controlling, even directive when needed to be. Yes, the main role of PMO is to help and support the project team. However, in practice, PMO can also provide navigation to understand how the project is progressing and how the project will progress in the future. Most notably, PMO can be directive whenever they are needed to help the decision-making process”.

Based on this understanding, the conclusion from Adi is proof that PMO can bring added value and an increased success rate. How can they do that?

  1. Stakeholder Engagement

In one project, there will be several stakeholders from different areas of expertise. There is always a big possibility to work in a silo, meaning that each stakeholder will work with their own internal team and alienate the other stakeholders in the process. That’s why PMO is needed to integrate these stakeholders with different mindsets. Therefore, PMO can act as a bridge and ensure the collaboration between stakeholders: reaching one vision, one cohesive team, and great synergy.

  1. Project Delivery & Change Management

There are bound to be changes and modifications during the project execution. This uncertainty is outside the scope of the PMO. Nevertheless, an effective PMO must analyze each change to find out the details and impacts of these changes. The main goal is to maintain great synergy during project execution, increase adaptability to changes, and drive organizational success despite the many changes that may lie ahead. Especially when it comes to National Strategic Projects (PSN) were more often than not the plan would be modified in accordance with the government’s policy, budget, and priorities.

  1. Overall Improvement

Not all projects are executed with sterling governance and standard procedure. There are lots of project managers and workers in the field who perform based on experience alone. It’s important to acknowledge that experience may differ from one person to another. Not to mention that our experience from five years ago may no longer be relevant for a construction project in 2021, for example.

That is why we need PMO that can help assist the project execution with proper governance, methodology, technicalities, and tools. In the process, it will increase consistency all throughout the projects so that the desired result can be achieved. This is especially beneficial for a program that involves multiple projects at the same time.

  1. Strategic Alignment

Even though the PMO is not necessarily the decision-maker, PMO is a trusted advisor that can help steer the project in the right direction. For Adi, it is essential to be aware of the project’s sensitivity towards the national strategy. Adi and all PMO must understand what kind of impact that the project will have on the national scale. What will happen if the project fails or is delayed? What kind of modifications are needed to improve the project? These are only small hints of issues and risks that a PMO should supervise to support overall strategic decision-making. **(PID)