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[email protected]This document was last updated on April 11, 2017
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How to balance PMO value generation
How to establish a proper mix of functions for your PMO and generate value
perception in the short, medium, and long term.
When selecting the functions of a PMO, we must consider a very important question:
how will the PMO potentially generate value perception in its stakeholders?
Perceived value can be considered as a type of evaluation about the usefulness of the
service, based on the perception of what is offered and what is received.
Customer perceived value can be easily confused with the concept of customer
satisfaction, but it is complementary and much more extensive. Technical quality, for
example, would be the only factor in this equation. Value perception includes aspects of
quality, and also emotional, social, and financial aspects. While satisfaction is universally
accepted as a one-dimensional aspect to be measured at the end of a provided service,
the perception of value is multidimensional, and it is created throughout the service
delivery process.
As a result of a cognitive process of comparison, the perceived value is seen as the
balance of the benefits received by the stakeholders in relation to the total “cost” to get
them, which may involve money, as well as any and all sacrifices necessary to obtain
those benefits.
PMO stakeholders will intuitively compare perceived benefits with their expectations
and their personal efforts to obtain them.
PMO stakeholders will intuitively evaluate the services offered (PMO functions) and
compare perceived benefits with their expectations and the costs of receiving them. This
balance will result in the stakeholder's perception of value in relation to the PMO.
Another point to consider is how the benefits generated by the PMO functions arise over
time, in which they will impact the stakeholders' perception of value at certain
moments. While some PMO functions may be able to generate value perception in the
short term, other functions may generate perception mainly in the medium or long
term.
This behavior can be explained with a simple analogy: Consider that the PMO functions
are medicines that can be prescribed to cure a sick patient (stakeholder expectations).
"Painkiller" functions would be an alternative that can end the pain immediately,
resulting in immediate relief. It would be a situation where the PMO provides functions
that potentially generate value perception in the short term, such as providing reports
to upper management or supporting project planning. However, in the long term, that
initial perception of value disappears and, as with painkillers, the pain returns as the
true illness has not been treated.
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Upper management at first may well receive new executive reports, as they will facilitate
decision-making processes - certainly one of their expectations of benefits. However, if
every month those reports consistently indicate poor performance on projects, the
initial perception of value will disappear. Executives will give less and less importance to
reports, and give more and more value to the performance of projects, which are not
being impacted by the PMO, since it acts as a simple messenger.
PMOs with excessive focus on short-term functions may not address the
organization’s real problems.
In contrast, there are situations where the patient needs to be treated with antibiotics,
where the mission is to effectively cure the disease. However, antibiotics take time to
work and, in the meantime, generate unwanted side effects.
When providing "antibiotic" functions, the PMO will potentially generate benefits that
will be perceived strongly only in the long term. An example would be the function of
providing project management methodology, a very important structural initiative to
heal (treat) different types of diseases (expectations). However, the benefits of this
function usually come only in the long term, generating common short-term "side
effects" such as resistance, bureaucracy, and low productivity. That is why it is necessary
to persist with the "antibiotic" and wait for the results that will appear effectively after
a certain time.
PMOs with excessive focus on long-term functions do not survive long enough to
demonstrate their value.
Finally, if the patient (organization) stops taking the antibiotic before the prescribed
period, the disease will not be fully cured. And when the symptoms come up again, a
much stronger "medicine" will be needed, in which it can be exemplified by unsuccessful
implementations that were abandoned before being completed. When these
implementations are reactivated, they can become much more complex, and require
stronger sponsorship to succeed.
PMOs with too much focus on "painkillers" potentially generate high perceptions of
value in the short term, but this does not hold in the long term as the real problems have
not been addressed.
On the other hand, PMOs with excessive focus on "antibiotics" may not generate enough
value perception in the short term, causing loss of sponsorship and stakeholder support.
Typically, these types of PMOs do not survive long enough to demonstrate their value.
The PMO VALUE RING methodology presents in its second step, a model that was
created to identify the balance of functions selected by the PMO, considering its
potential value generation over time, based on the experiences of mature PMO leaders.
We mapped the experience of 122 PMO leaders and collected their impressions on how
each PMO function can potentially generate value perception over time. The results of
our analysis were recorded in a benchmarking database that can be used to evaluate
the PMO balance.
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The PMO must have its balance guaranteed by a proper mix of functions, aligned with
the expectations of the stakeholders, and be able to generate value perception in the
short, medium, and long term.
The only thing that really matters is delivering value to stakeholders. The PMO needs to
complete this mission, but must also plan how this value will be delivered over time.
The PMO needs to deliver value to stakeholders by planning how this value will be
delivered over time.
This model is one of the steps of PMO VALUE RING, an innovative methodology and
benchmarking tool for creating, evaluating, and managing PMOs.
PMO VALUE RING has been developed in collaboration with experienced PMO leaders
from around the world, and more than 4,500 professionals in 65 countries have been
using it.
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