Board executives often approve IT projects without fully understanding them, which is why organisations need to establish a Project Management Office (PMO), says Chris Gillies, a former CIO of the Bank of Melbourne.
Speaking at the IT Project Portfolio Management conference in Sydney earlier this month, Gillies said a PMO provides transparency by using common methodologies to evaluate projects.
“Project failure can be reduced if common evaluation methods are used [because] board executives often approve projects without fully understanding them,” he said.
“A successful PMO handles end-to-end all types of projects from all areas of the business and constantly reviews them to make sure they don’t become a burden.”
Gillies also claimed an effective PMO will reduce IT project costs by as much as 30%.
She also went on to say that CIOs are often blamed for failed project governance, although governance and strategic management are boardroom responsibilities.
Her observations are based on 35 years of IT industry experience.
“PMOs work because they have clearly defined roles, relevant IT information that can be understood by everyone and definitive accountability where decision makers are identified,” she said.According to Gillies, a PMO should be a single entity which controls all areas of project management such as strategy management, where board members determine business needs; programme management, with group activities in logical order to achieve clear business outcomes; and portfolio management, which lists current and pending projects to optimise enterprise value.
She said PMOs determine project value through assessing dependencies, the risks of commencing or blocking a project, TCO, application performance and project capacities.
Paul Campbell, IT director at the Australian Catholic University (ACU) and former project manager for the Commonwealth Bank, said trust between the board, executives and the CIO is a crucial triangle in the development of a successful PMO.
“Trust can be built if IT consults all project stakeholders thoroughly, develops roadmaps, and uses common documentation and methodologies,” Campbell said.
“[A PMO] should use one common tool, one database, a glossary and there should be training and information sessions for stakeholders.”
He warned business to never outsource project management because poor project management affects all business processes.
Campbell, who has worked on multiple projects for ACU and law firm Clayton Utz, recommends using scorecards listing the top five projects of each department in terms of costs, schedules, and priorities.
Peter Harrison, consulting director of enterprise value management for Fujitsu Consulting Australia-New Zealand, said costs should only be cut after real value has been properly identified.
“Only cut costs when you understand what generates value and where, because there is a typical disconnect between management of projects, operations, strategy and architecture,” Harrison said.
He cited an IBM survey that found 40% of IT spend is lost due to problems in project management. “Up to 90% of IT spend is used running the business [and] this needs to move to transforming the business when thinking of building a PMO,” Harrison added.