Why do companies turn to external PMOs?

June 25, 2018

Imagine a world where strategic programs are key to the long-term success of a company. Such initiatives define new products and services, establish work streams that derive from the overarching go-to-market strategy, drive business imperatives which are then translated into transformations that will re-shape the ways-of-doing business, etc. Essentially, we are talking about the future of a company. 

 

Large investments meant to advance and secure a competitive advantage in the next 5+ years to come, right? Now, in the majority of cases a capital expenditure budget which had been allocated to a set strategic projects is not simply spent by going to a store and buying an off-the-shelf product…it wouldn’t be the killer differentiator per se. So, what happens is that new services, products, initiatives are defined in a business case like document and translated, with some variations, depending on the methodology used, into a series of program documents detailing how each project is to be managed and by when it needs to be delivered. This seems pretty straight forward, so how come companies hire external PMO Managers that decide over the future of a company? The key here is that the “HOW” precedes the “by when” and in turn the “who” is the ultimate starting point. Ultimately, the person in charge of a program defines the how and depending on how bumpy that journey is the program will be delivered accordingly. 

Why is the PMO Manager so important? Well, it matters if the person is already known to the project team and starts with a set of prejudices (the “expectations”). Most human beings tend to be risk averse by default hence over-think the mitigation process and divert into an overly negative spiral about what could go wrong and why. This also includes the characteristics of the person leading the initiative and the rationale why the program was doomed from the beginning. In order to avoid potential team or stakeholder bias towards (1) the initiative itself and (2) the leader being responsible for its delivery, companies tend to hire neutral outsiders who are capable of navigating the team’s dynamics and continuously calibrate their expectations/emotions with the true essence of what needs to be delivered. It is also easier for an outsider to not be biased towards the team members as usually there’s no history to pull on to justify why a milestone will not be achieved. 

Another important component internal PMO Managers are facing is two-fold, either they are not full-time PMO Managers or if they are, they are dumped on with everything that is declared to be strategic. Eventually, allocating someone to x % to manage a program as eg. “a development opportunity” without reducing their overall workload by at least the same percentage or simply allocating more work to the internal PMO Manager puts the initiative at risk. The consequences are the all too well-known moving milestones and delays after delays.

On the other hand, the external PMO that is allocated temporarily is typically planning his schedule with some buffer time in case something goes wrong his employer (the functional service provider) might have the flexibility to add more resources depending on the status of the initiative and how smooth everything is running. 

Whether it’s adding someone neutral and unbiased to the dynamics of the company or due to a lack of resources at hand, hiring an external professional seems to be the way chosen by so many companies. In the end, this approach is paying off for all parties: the team & stakeholders focus all energy on the work at hand, internal resources are freed up for projects where internal company knowledge is essential, and the strategic program is being delivered according to plan. 

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