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The Strategic Dilemma of the Central PMO: Friend or Foe?

COMMENTARY 

By Inken Lasar

Dubai, UAE
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Introduction

Central Project Management Offices (PMOs) have expanded since the 90s from traditionally project-driven industries, such as aerospace, defense and heavy construction industries to non-project driven industries. It was mainly due to the looming recession that the benefits of using project management, such as improved efficiency and quality of delivery, were now recognized as being applicable to other industries as well.

However, the way how Central PMOs are being understood and used is significantly different from organization to organization. In mature companies, they are able to position themselves as true partners for the Executives and are generating value through delivering projects, providing a common methodology for the organization or driving project portfolio decisions or performing all of those activities. In immature markets, however, where the role and benefits of PMOs are not well understood, they find themselves caught in a strategic dilemma which negatively affects their effectiveness in performing their role.

Why is this so?

Traditionally, the power of the organization has been residing with the line functions. This organizational model has supported the division of labor and the rapid economic growth of the age of industrialization. Projects were delivered by the different departments of the line organization, with differing levels of quality and consistency.

In immature markets, where there is a quasi-monopoly or duopoly, varying outputs are not creating too many problems. However, where competition is strong and quality of project delivery needs to be at consistently high levels, even small mistakes will make themselves felt very quickly and lead to a huge competitive disadvantage. That is why most organizations immature markets were looking to avoid further project failures and proceeded to formalize central units to establish common standards or to otherwise enforce consistency in project delivery. Over time, many of those Central PMOs have moved forward from this basic task of providing project oversight and standardization to offering Executive decision-making support for the Corporate Project Portfolio.

However, in immature markets, where the power of the organization still resides in the line and there is no or only limited Executive support, PMOs at best have two strategic options.

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About the Author

pmwj26-sep2014-Lasar-AUTHORInken Lasarflag-germanyflag-uae

Dubai, UAE

Inken Lasar is a business strategy consultant with more than 13 years’ experience in the areas of business and commercial strategy, management consultancy, marketing and portfolio management. She excels in driving business results through the establishment and successful operation of the corporate planning process. Currently, she is heading the Project Portfolio Management division in a leading telecom player in the GCC. Inken can be contacted at [email protected].

To view more works by Inken Lasar, visit her author showcase in the PM World Library at http://pmworldlibrary.net/authors/inken-lasar/