PMO-CP Content Guide

1. Background:

• PMO-CP is the certification on PMO Value Ring Methodology which taken 10 years to develop with
global experts from 18 different companies or region.
• The PMO Value Ring Methodology is to create “Value”, ie. Generate PMO Value if PMO wants to Survive
and Sustain.
• The PMO Value Ring Methodology is “Ring”, because of CI or cyclic nature with start and end and
initiate another cycle. Because time to time we need to redesign and rethink to make changes as per
changing
• requirements and expectations of the stakeholders. Using agile approach.
• PMO Value Ring Evaluation should be done: Annually, Relevant change in Organization and New
Stakeholders with significance relevance.
• PMO Value Ring was created by PMO Global Alliance which is community of PMO Professionals. When
to use PMO Value Ring:
• Setup up the new PMO and Annually evaluating the changes required.
• Resigning the existing PMO, because want to try something different challenging situations.
• This PMO Value Ring methodology will give to alternatives, information to take decisions, awareness
about something could see before. Final decision with PMO head based on the information provided
by PMO Value ring about how each function is performing.

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2. 7 PMO Myths:

• Myth 1: "Most PMOs fail for lack of sponsorship. "

• Myth 2: "The first step is to choose the type of ideal PMO for the organization. "
• Myth 3: "Providing methodology and tools for project management is the main focus of any PMO. "
• Myth 4: "PMO processes are project management processes. "
• Myth 5: "The success of the projects is always the best evidence of the success of the PMO. "
• Myth 6: "The skills of a PMO professional are the same of a project manager. "
• Myth 7: "Mature PMO are directly involved with strategy and portfolio management. "

3. PMO Value Ring Essentials:

• PMO is the supporting areas in the company like HR/IT/Admin support functions. That’s why important
to change perception of the value being considered as just a supporting function.
• PMO is the service providers and being a service provider the most important is the CUSTOMER.
• Hence for PMO Customers are the PMO Stakeholders (not the PMO Team). These are Business
Executives, Senior Management, Project Manager, Project Team and Functional Managers.
• That is why PMO there is no dedicated model due to different requirements and expectations from
organization to organization. Hence as per the needs of organization and stakeholder’s expectations
PMO model should be setup. However, it is very important in terms of ALIGNMENT between the
Organizational Challenges and Stakeholders Expectations to address the issues correctly by PMO
based on setting up the desire functions addressing the problem or providing desire level of benefits.
• PMO Value Ring never followed preestablished models create your own model based on organization
and stakeholders needs.
• Traditional PMO’s focus on tactics rather than results. Now the PMO’s need to be active, collaboration
and generate value to organization. Following best practice is not the only thing, need to go beyond as
per hour of need or organization needs and maturity.
• Therefore, now it is “STKAEHOLDER Oriented PMO” rather “TECHNICAL PMO”.
• PMO different from industry to industry and company to company.
• PMO Team should focus based on JOHARI Window concept.
• Perception of Value in PMO is “FEELING”. That whatever PMO is doing is Usable and Important that the
Customer should feel being PMO as a service provider. Therefore, here the PMO Stakeholders should
have correct perception of value being provided by PMO in addressing the Stakeholders expectations
on benefits through functions designed in solving the problems.

4. PMO Value Ring Mindset:

• The PMO VALUE RING methodology proposes that the PMO should be seen as a "service
provider".
• As such, it has "clients", its stakeholders, each with specific needs and expectations.
• Meeting stakeholder expectations is the best way to generate perceived value.
• The PMO will accomplish this by providing "services" (functions) in the best possible way.

So, it is THE STAKEHOLDERS-DRIVEN PMO.

• Both PMO’s have different functions/services offering, due to different stakeholder’s expectations
and hence will have different results.
• Different Expectations of Stakeholders/Different Functions

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• Different Results
• Different PMO’s

• Never follow pre-set types of PMOs. This is the shortest way to failure. Using predefined models
• Success will depend on the ability of your PMO to be flexible enough to adapt to stakeholder
needs.
• There is no right or wrong in PMOs. There is only what you need to do so that the value of your
PMO is recognized.
• Do not be afraid - or lazy - to re-evaluate or reinvent your PMO whenever necessary.

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• PMO Functions selection/Stakeholders expectation & PMO Mix functions (Balancing will go
parallel)
• Once Functions are selected and PMO Balance Mix is done, then defining the processes for each
function

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• For each Process, defining the KPI’s for monitoring, selection of team based on competency and
assessing PMO maturity for each process from Current State to Target State
• PMO Team Competency and Maturity Assessment leads to PMO ROI Calculation.
• Finally, Process KPI’s and PMO ROI will lead to PMO Balance Score Card (Performance)

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5. Topic-1 Collection Stakeholders Expectations from PMO/Define PMO Functions/Selection of
Benefits:

• Choosing a "type" of PMO is the first step to failure as it induces the organization to follow pre-
established models as if they are the way to success.
• Reality shows that flexibility is the key to generating value. Thus, there is no "ideal type" of
PMO.
• In fact, choosing a "type" is absolutely dispensable. What really matters is that the PMO offers
services (functions) that meet the needs of its stakeholders.
• The PMO function mix, therefore, can be strategic, support, centre of excellence, or several of
these types at the same time.

• Objective is to meet Stakeholders Expectations. While to achieve due to different expectations from
different stakeholders. As something is value to one stakeholder not for the other.
• Each Stakeholder of the company should be considered as specific customer, so this needs to
prioritize, consider come stakeholders as individuals as being important (Senor executives, higher
management) and some as groups eg Project Managers, Functions Managers etc. to get the
expectations clearly from them.
• This is why, we need to identify which PMO functions will address the problem of the organization and
meet the expectations of the stakeholders. Not necessary that all 26 functions are required.
• PMO Functions: 26
• PMO Benefits: 30

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• In order to define the functions of the PMO, it is necessary to identify the benefit expectations of
the Stakeholders, especially the executive level.
• From these expectations, define the set of functions that will maximize the chances of meeting the
identified demands.
• The greater the adherence to the expectations of the stakeholders, the greater the value created
for the organization.
• In step 1 of the PMO VALUE RING methodology, the benefit expectations are collected.
• From the correlations between expectations and functions present in the benchmarking database, the
system offers recommendations of priority functions to meet the demands.
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• These PMO benefits are the expectations which stakeholders wants, so for current cycle (this annual
cycle) we can ask the stakeholders which benefits are important to them and they would like to see in
the current year. This will set up the right expectations from PMO Stakeholders in order to define the
functions which can address these benefits/meet expectations.
• How to collect the expectations (potential benefits they are seeking):
• Create the PMO Stakeholders Group to gather the expectations in controlled manner. Eg Directors
and Project Managers.
• Analyse the relevance of each group using AHP (Analytic Hierarchy Process)
• Select the benefits selected by group of stakeholders with the weight they have assigned, eg
Directors consider B6 is very high benefit with weight of 5.
• Then Calculate each benefit as per Relevance Ratio X Weight Assigned by the group of stakeholders
to get overall benefit no. eg B1 is 260.
• Finally, calculate the % relevance or % contribution of each benefit to select max. contribution
benefit for priority. Eg, B2>B6>B1>B8 etc. or we can create the Perato as well.

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• How to define PMO priority functions addressing those benefits which is selected:
• We will assess the probability of each function in addressing in delivering the specific benefit.
• For each benefit you will assess the probability of each function (26) in delivering the benefits,
this can be done by experts group.
• Then you apply % Relevance of each benefit into consideration by : % Relevance X % Probability
in delivering results (shown in Green) eg. B1-F1: 0.173
• Sum all the green no’s to get total for each function Eg. F1 is 0.46
• Sum the all-functions overall no. to get final number. Eg 3.9
• Finally calculate the % Contribution of each Function from Overall Function No. to prioritize the
functions. Eg F1 and F4. Finally create the Perito to finalize the important functions.

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Conclusion:
• Get the list of potential benefits based on the stakeholder’s expectations and list of potential
functions which will address the same. Defining the potential functions!
• Setp-2 we will further evaluate both to take final decision in creating PMO Balance Mix of functions
to stakeholder’s expectations.
• Objective is to identify the % relevance of functions, which will be used to evaluate the BAI.

6. Topic-2: Defining and Balancing PMO Mix of Functions

• Different expectations must be met by a set of different functions.

• Therefore, there is no default for PMOs. Each should provide a specific mix of functions.
• This ability to adapt to expectations is what contributes to the success of the PMO.
• It is common to imagine that certain functions "should" necessarily be offered by a PMO.
• In fact, each function needs to deliver benefits that meet stakeholder expectations.

• Validation of potential functions along with benefits (EAI and BAI) align with stakeholder’s expectations
to take effective decision.
• For each selected function question should we do that? Or others are more important than this looking
into budgetary constraints of PMO.
• Balancing the PMO Potential of generating perception of VALUE over TIME:
• While selecting the function we also need to evaluate whether that selected function will deliver the
perception of VALUE over TIME.
• There could be some functions which can generate value immediately eg Reports and the
stakeholders can feel the same quickly, however some may take time (long term) to deliver the
value. If we do not initiate now then long-term benefits. Eg defining methodology which initially will
be adapting based on needs.
• Categorizing the generation of VALUE (Perception of Value Over Time) as to balance the overall PMO:
▪ Short Term: 35%
▪ Medium Term: 40%

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▪ Long Term: 25%
•
This need PMO is well balanced based on selected functions (selected functions should be
mapped with value delivery timeline as well) in delivering the benefits/stakeholders expectations
as Value for time.
• EAI (Stakeholders Expectation Adherence Indicator):
• Focus in creating PMO Balance Mix (of functions) → Generating VALUE over TIME (Short
Term/Medium Term/Long Term)
• There are 3 indicators:
▪ EAI (Expectations Adherence Indicator) → Shows how the mix of functions selected for
PMO is ADEQUATE to meet set of expectations of PMO Stakeholders. Or functions which
are selected is how much aligned with stakeholder expectations.
▪ BAI (Benefits Adherence Indicator) → Shows how each benefit is being address by the
selected PMO mixed of functions or Probability in delivering benefit by respective
function.
▪ Mix of functions Balance (First point stated above considering PMO functions as balance
mix, in delivering value in short/medium/long term

• EAI and BAI should be analysed together not in isolation. As EAI need to compared with BAI to see
whether good or not (good PMO mix or not)
• EAI is a Global indicator of the PMO Stakeholders where as BAI is specific to each benefit or series of
benefit indicators.
• For EAI example:
• Select the function F1, which has % relevance as per stakeholders is 11.8%. hence your EAI is 11.8%
• Further you have selected another 3 functions, total 4 functions which will be EAI as 36.2% which is
sum of the % relevance of all selected functions.
• Any EAI numbers can be judge as good or bad unless it is mapped with BAI as well. Focus should be
to MAXIMIZE the EAI. There is no perfect threshold for this as it depends on addressing the
benefits expected.
• Consider that 30 benefits are targets to be achieved and for that there are 26 functions, which may
address these targets/benefits and hence choosing the potential targets/benefits having more
important relevance as of now (urgent/important to achieved) rather going with all 30 targets. This is
matter of prioritizing.

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• That’s EAI should be mapped with BAI to make perfect balance mix of the PMO functions for
implementation.

• For BAI example:

• For each benefit, analyse the % probability of delivering those benefits by the respective functions.
Eg. B1 could be delivered by 100%, 0%, 50%, 50%, 0%, 5% etc by functions F1, F2, F3, F4, F5
respectively.
• Hence the % BAI for B1 (benefit) is the max of the % probability (chance of achieving it) delivered by
any function. i.e BAI = Max (% Probability of Fx). Eg for B1, % BAI is 100% as it can be delivered by
function F1.
• Select the potential benefits based on the % relevance to get overall top % benefits. Eg B1/B2/B4/B6
are selected due to high relevance and providing overall 73.3% of benefits.
• For these selected benefits calculate the average (BAI) = 87.5%, which is B1=100%, B2= 100%, B4 =
100% & B6= 50%.

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• Therefore, for the selected 4 functions, average BAI is 87.5% in meeting the client expectations EAI
of 36.4%, hence PMO balance functions mix is good enough to meet client expectations in meeting
potential benefits with a success rate of 87.5% (Probability Rate in delivering TOP benefits)
• BAI is the key deciding factor, whether the meeting the client expectations. To manage the
“Quantity” with “Quality”.

Conclusion:
• EAI will provide the % relevance of the selected functions in meeting stakeholders
expectations.
• But BAI will tell the actual potential or % success in delivering those benefits which
stakeholders are expecting from selected functions. This is Maximum Probability of delivering
the respective benefit across the functions.
• This together EAI and BAI helps to create a perfect balance PMO functions mix to meet the
stakeholder’s expectations in delivering VALUE over TIME with Short/Medium/Long Term!

• Each function offered by the PMO has an ability to generate value perception over time.
• "Reporting to the executive level" is capable of generating value perception in the short term,
since executives, until then, had no access to information for decision making.
• "Providing methodology and tools" is able to establish the necessary basis for the maturation of
the organization, but the perception of value in relation to these results, in general, only comes in
the long term.
• Excessive focus on functions that generate value perception in the short term causes the PMO
to lose support and sponsorship over time, as the necessary basis for the evolution of
organizational maturity are not effectively built.
• Excessive focus on functions that generate value perception in the long term causes the PMO
to lose support and sponsorship before beginning to generate effective results.
• The solution is to balance the PMO mix with functions capable of generating value perception in
the short and long term. “Value Delivery” Over “Time” (Short/Medium/Long)

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7. Topic-3: Establishing PMO Processes:

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• Often, PMOs are built contrary to what would be recommended. Firstly they establish the PMO
team, then what the PMO will do.
• It is advisable to first formally define the process for each PMO function.
• For example: How does the PMO intend to offer mentoring? What is the process for this?
• The PMO VALUE RING methodology offers process, flowcharts, recommendations,
documents and best practices.
• This way, it is possible to align expectations with stakeholders, increasing the chances of
making the value of the PMO be recognized.

• Designing the process for the each PMO function. At least 1 Process for each PMO function.
• Catalogue of Services will help the to explain how the required services will be delivered to the
PMO stakeholders, this each service is nothing but the respective PMO function.
• Every process has inputs, outputs, R&R, checks etc. This will help to keep the expectations aligned
with stakeholders based on the process tagged to each functions/service of offerings.
• Every process we must have Indicators, each Indicators MUST have Goals (Service levels as per
Service Catalogue) or KPI’s or performance Metrics will tell how the specific process/function is
performing.
• PMO process defined against each selected Functions & define relevant performance
indicators for that PMO function for performance evaluation.
• Each process should have:
• Objective
• Top Benefits
• Related functions (functions to which it is tagged)
• Indicators to evaluate the performance
• Competence level to perform that process
• Maturity Level of process.
• This all will be there in the service catalogue shared with stakeholders.
• Service Catalogue is the consist of list of functions or service offering with all necessary details,
each function will have Objective/Process/Flowcharts/Tool & Techniques/R&R/Metrics
• Function Objective: Each function should have its purpose clearly described, establishing the
scope that will be met and, if applicable, the limits that exist in the provision of this service. Within
the previous context, what are we talking about? Functions details (Objectives/FlowChart, Tools,
Techniques/Responsibilities/Metrics) are part of Service Catalogue. This also includes PMO
process guide for that function.

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• Function Flowchart: Each function should have a flowchart, demonstrating the activities required
to provide the service and the flow of information, defining inputs and outputs, as well as the
techniques and tools used. Within the previous context, what are we talking about?
• PMO Process Guide: Provides recommended specifications for each function (the processes in the
database); and can be used as a reference to create the PMO service catalogue. In other words, if
there is an interest in starting a new service in a PMO, it is necessary to use the recommendations
provided by the PMO PROCESS GUIDE as a starting point, making the necessary adjustments in
all suggested items, in order to adapt the process to the reality of the PMO. Eventual changes to the
service should always be incorporated into the catalogue, maintaining strict version control of this
document.

Conclusion:
• Designing the process for the each PMO function. At least 1 Process for each PMO function.
• Every process we must have Indicators, each Indicators MUST have Goals (Service levels as per
Service Catalogue) or KPI’s or performance Metrics will tell how the specific process/function is
performing.
• PMO process defined against each selected Functions & define relevant performance indicators for
that PMO function for performance evaluation
• The service catalogue should have list of all services/functions offering with all details related to
each function:
• Objective, purpose of service offering
• Tools, Technique, Process Flow
• R&R
• Metrics
• Define process.
• PMO Process Guide: Provides recommended specifications for each function (the processes in the
database); and can be used as a reference to create the PMO service catalogue.

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8. Topic-4: Defining PMO Performance Indicators:

• Project success is not always indicative of the success of the PMO. Everything will depend on
what functions the PMO is providing. Some can be measured in this way, some cannot.
• The performance of the PMO in providing each function should be measured from specific
indicators.
• The PMO VALUE RING methodology provides performance indicators for each function selected
for the PMO, with details needed for its measurement.
• An example: "Provide methodology" can be measured by adherence to the methodology used
(% of projects that use the methodology) and by correction in use (% of projects using it with
no issues).

• Example:
• Identify potential indicators for the function
• Define the relevance for each indicator
• Define the Goal (Internal/External) against that Indicator
• Identify the Current Status in terms of achieving that goal for respective indicator
• % Indicator performance for that indicator is Current Status/Goal Target
• Function Performance Indicator is Sum of the Indicators value w.r.t Relevance. Hence Calculate the
Indicator performance w.r.t Relevance = Indicator Performance X % Relevance and then sum up this
to get overall function performance indicator.

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Conclusion:

• The PMO VALUE RING methodology provides performance indicators for each function selected
for the PMO, with details needed for its measurement.
• An example: "Provide methodology" can be measured by adherence to the methodology used
(% of projects that use the methodology) and by correction in use (% of projects using it with
no issues).
• Generally, 2-4 indicators are good enough for the measuring purpose for each function.
• Each Indicator we must have Goal/Target to achieve and against it measurement of achievement
is done w.r.t current state, if required action plan to be define to reach to target state for this
indicator via Process/Technology/People Training.

9. Topic-5: Defining PMO HC and Competencies:

• The competencies of a project manager are not necessarily the same as those of a PMO
professional.
• The competencies required will depend on the functions that are being offered to
stakeholders.
• The professionals that best meet the required set of competencies to each function should be
allocated.
• The greater the adherence to the competencies required, the greater the value generated.
• The PMO VALUE RING methodology offers a 360° feedback tool to map existing competencies to
get Competency Adherence Indicator (CAI).

• It also offers a tool to identify the most suitable professionals to perform each function,
considering the necessary and existing competencies.
• Competency levels are 1 (Low) to 4 (Very High)

• PMO Competencies: 10 mapped against each function with difference relevance importance:

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• Ability to Influence, Ability to Integrate, Client Focus, Conflict Management, Effective
Communication, Interpersonal Relationship, Proactivity, Knowledge Management, Process
Management and Project Management
• Mapping each competence levels for every PMO members based on evaluation process by several
reviewers on levels of competency in specific competence eg project management and then based
on competency level assigning/tagging to respective PMO function to perform that function.
• While doing the competency assessment (CAI) 360-degree review is required from different
stakeholder’s groups eg Project Managers, PMO team, PMO Head, Functional Managers etc in order
to evaluate the competency level more accurately for each person.

• Every PMO team member competency level is identified to get overall competency level (CAI) of
PMO which is Average of CAI of each Function.
• PMO (CAI) = Average of CAI (Fx)
• In below table it is 74% CAI of PMO.

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• In above table if help is accessing the work allocation to PMO team based on their competency level
in addressing the functions for delivering the benefits.
• While selecting the person, finally CAI (Competence Adherence Indicator) Personal for that function
must be identified.
▪ Situation 1: 1 Person is selected, (Refer image “PMO_Competence_Functions_1”)
▪ Situation 2: 2 Persons are selected and workload is divided between them and not work as
a team, then need to take average of the competencies (Refer image
“PMO_Competence_Functions_2”)
▪ Situation 3: 2 Persons work as a team and complement each other is competencies eg
Project Management and Analytical Skills, in that case we must take best CAI of each
competency to calculate overall CAI for that function. (Refer image
“PMO_Competence_Functions_3”)
▪ Note: If CAI is less eg 60% or 70%, then action plan needs to be defined for that person to
improve his competency in delivering those functions and regular evaluation unless reached
to satisfactory level of 85-90% of CAI.
▪ PMO (CAI) = Average of the all-selected Functions CAI. (Refer image
“PMO_Competence_Functions_4”)
• Finally calculate the HC required to delivered that function.

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Conclusion:
• The competencies of a project manager are not necessarily the same as those of a PMO
professional.
• The competencies required will depend on the functions that are being offered to
stakeholders.
• The professionals that best meet the required set of competencies to each function should be
allocated.
• The greater the adherence to the competencies required, the greater the value generated.
• The PMO VALUE RING methodology offers a 360° feedback tool to map existing competencies to
get Competency Adherence Indicator (CAI) should be taken from different groups Project
Managers, Functional Managers, PMO Head, PMO team etc.
• The 10 competencies are:
• Ability to Influence, Ability to Integrate, Client Focus, Conflict Management, Effective
Communication, Interpersonal Relationship, Proactivity, Knowledge Management, Process
Management and Project Management
• Competency levels are 1 (Low) to 4 (Very High)
• To calculate the Competency:
• Define competency level for each user based on average rating provided on specific
competency by several evaluators.
• Define the % relevance of each competency applicable to that function or relevance of
each competency for specific selected function.
• Calculate each competency value = Average rating of competency X % Relevance.
• Then sum all competencies score to get overall competency level of specific user in
that function.
• Now based on highest value of competency score, that personal will be selected for that
function and it is Competence Adherence Indicator ((CAI) fx.
• Single User assigned to function: Above formula will be used
• Work is balance between 2 users and not working as a Team: Competency level (CAI f) is
Average of Competence level of both users.

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• When users are working as team and complementing each other in different
competencies 2 users, than Competence Adherence Indicator ((CAI) fx is calculated as
Sum of Max Competency level in each Competency/4 = % CAI (fx)
• CAI of PMO = Average (CAI of each function).
• If the competency levels are low w.r.t desired level, then action plan to be define over
time to improve the competency level from 1 to 4 to ensure benefits realization for the
PMO Stakeholders.

• Important tools and Models:

• Define & prioritize the functions to be implemented with the PMO MIX MANAGER.
• balance the mix of functions with the PMO TUNE.
• Design the processes of the functions with the PMO PROCESS GUIDE.
• Performance indicators with the PMO PERFORMANCE MODEL.
• Establish the critical competencies for the PMO team with PMO COMPETENCY MODEL
• Identify the PMO maturity level using the PMO MATURITY CUBE
• PMO process guid to design the processes of the functions.
• It’s not part of the catalogue
• SLA is a part of the service catalogue

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10. Topic-6: Assessing PMO Maturity & Planning for Evaluation:

• Being strategic or operational is not a sign of maturity, but a consequence of stakeholder

needs.
• It is important to remember that "Organizational Maturity in Project Management" and "PMO
Maturity" are different concepts.
• The mature PMO offers functions - only the necessary ones - with a high level of sophistication
and, as a consequence, can generate a greater perception of value.
• The PMO VALUE RING methodology offers a tool to identify PMO maturity levels, and
recommendations for PMO evolution.
• Will come with Knowledge along with Experience, either of one will not give the maturity at all! It
includes project, program and portfolio management.
• PMO types focusing Operational PMO’s, Strategic PMO’s depends upon alignment as per
expectations and then look for Maturity in that service of offerings. Hence Alignment will be first and
later Maturity in delivering those services for expected benefits to the stakeholders. “Maturity”
without “Alignment” is NOTHING!!
• These 26 PMO functions are divided into 3 Categories:
▪ Strategic: Connected with Strategy or Top Management or Portfolio or Benefits
Realization Management.
▪ Tactical: Providing direction for group of projects or people eg Methodology, Project
Management Tools, Trainings, Manage Resource between projects.
▪ Operational: Focus on project wise, eg controlling project time and cost, provide project
reports, provide planning support, providing mentoring etc.
• Maturity drivers, are key to evaluate current state and helps in defining path to improve the maturity
in those functions.
• Therefore, each selected function should be evaluated for “Current Maturity Level” (1 – 4) and define
action plan to improve the current state of Maturity level.
• During Maturity level of assessment for each function (Refer image “PMO Maturity Level”)
▪ Assess the Current Maturity Level (1 -4)
▪ Define the Target Maturity Level (1-4)
▪ Identify Functions Maturity Indicator = Current Maturity Level/4 (total levels of Maturity is 4)
= 2/4 = 50% is the Maturity Level.
▪ Cycle Maturity Gap is Difference Between Current Maturity Level (2) and Target Maturity
Level (3), hence Gap is “Yes” for this need to define action plan to improve the Maturity level.
▪ Action Plan for improvement will be: Process, Technology or Training of People etc.
• Then calculate the Maturity Level for each Maturity Category (Strategic/Tactical/Operational) that is
the “Average of the Functions Maturity Indicator”.
• Overall PMO Maturity Level is the Average of Maturity Level of All 3 Categories
(Strategic/Tactical/Operational)

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• Comparing the maturity level between organization is not possible as requirements and
expectations are different. However way will be for same type of function between 2 organization
compare the maturity level based on the methodology followed. This will provide insights that which
methodology is best.
• Comparing the maturity models w.r.t industry benchmark may not be useful as the requirement of
the organization may be different and not logically to make with industry always.

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Conclusion:
• Being strategic or operational is not a sign of maturity, but a consequence of stakeholder needs.
• It is important to remember that "Organizational Maturity in Project Management" and "PMO
Maturity" are different concepts.
• The mature PMO offers functions - only the necessary ones - with a high level of sophistication
and, as a consequence, can generate a greater perception of value.
• The PMO VALUE RING methodology offers a tool to identify PMO maturity levels, and
recommendations for PMO evolution.
• These 26 PMO functions are divided into 3 Categories:
• Strategic: Connected with Strategy or Top Management or Portfolio or Benefits
Realization Management.
• Tactical: Providing direction for group of projects or people eg Methodology, Project
Management Tools, Trainings, Manage Resource between projects.
• Operational: Focus on project wise or individuals, eg controlling project time and cost,
provide project reports, provide planning support, providing mentoring etc.
• Maturity drivers, are key to evaluate current state and helps in defining path to improve the
maturity in those functions.
• During Maturity level of assessment for each function (Refer image “PMO Maturity Level”)
• Breakup the selected functions into Category (Strategic/Tactical/Operational)
• Then assess the Current Maturity Level (1 -4) for all functions with in the group based on
360 degree evaluation and define levels of Maturity.
• Then, Define the Target Maturity Level (1-4) as improvement with timeline
• Identify Functions Maturity Indicator = Current Maturity Level/4 (total levels of Maturity is
4) = 2/4 = 50% is the Maturity Level.

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• Cycle Maturity Gap is Difference Between Current Maturity Level (2) and Target Maturity
Level (3), hence Gap is “Yes” for this need to define action plan to improve the Maturity level.
• Action Plan for improvement will be: Process, Technology or Training of People etc.
• Each Categories maturity level is assessed as average of maturity level of each functions:
▪ Strategic Functions = Average of Maturity levels of all selected functions tag to this
category
▪ Tactical Functions = Average of Maturity levels of all selected functions tag to this
category
▪ Operational Functions = Average of Maturity levels of all selected functions tag to
this category
▪ Overall PMO Maturity level = Average Maturity level (Strategic/ Tactical /
Operational)
• Finally, PMO Maturity levels can be seen as:
▪ Functions Category level (Strategic / Tactical /Operational) levels
▪ Overall PMO Maturity level
▪ Action plan is defined for maturity improvement as per needs on respective
categories Strategic / Tactical / Operational. This could be competency/process
improvements of PMO.
▪ Action plan focus on Technology/Process/People Training.
▪ Maturity evaluation must be done annually
• PMO Maturity will occur when PMO becomes Sophisticated in these 3 areas
Strategic/Tactical/Operational.
• Target / Desired Maturity level is the “Level of Sophistically” desire to achieve that
function objective.

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11. Topic-7: Calculating PMO-ROI:

• Calculating the ROI of a PMO is a challenge, especially when using traditional models, which
do not consider the variability of the PMO phenomenon.
• The basic premise is that PMOs exist to reduce the losses observed in an organization's
portfolio.
• Each service/function has a probability of contributing to the recovery of portfolio losses.
• In each organization, different reasons can cause losses in the portfolio.
• The PMO VALUE RING methodology uses the experience of the community of PMO
professionals to estimate the potential for loss recovery from the reported problems and
functions offered by the PMO.
• The recovery potential is directly influenced by the maturity of each PMO function and the
level of competency with which each function is offered

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• ROI model is based on assumptions which needs to be validate during time. Generally, when we
present the ROI, basically assumptions play critical role which you have considered in the
anticipation of the rewards through investments.
• No fixed model as there is several functions with specific processes, benefits and competencies
involved in it.
• Losses can have multiple reasons, eg mis management, wrong estimation, not managing the risks
properly or suppliers not managed properly
• Evaluating the ROI:
• To calculate PMO ROI, we need Portfolio Budget, % estimate loss and PMO Cost (investment)
• Based on historic data, calculate losses against the budget for previous year, 2019. Eg 20 Million
Budget and 2 million Loss, that is 10%
• For the current year eg 2020, considering 30 million Budget and 3 million losses with same % loss
rate assuming if no actions are taken.
• Now to analyse these losses, you identified 4 different problems P1 to P4.
• To address the contribution of each problems (P1-P4) for losses, you identified the % contribution
based on AHP method.
• Each Problem (P1-P4) is contributing to loss eg P1: 1.5 million, P2: 900K, P3:600K and P4: Nil.
• Now identify the functions (F1 to F26) which can contribute in address in these 4 problems (P1-P4)
• Assigning the % resolution for each function addressing each problem
• Finally selecting those functions (highlighted in Yellow) which are valuable in addressing the
problems and removing other functions
• Select the Max of the contribution in fixing each problem across the function. That will be % potential
in solving the problem
• Calculate the expected value= % Max contribution in solving the problem X Potential loss
contribution by that problem. Eg 750K for P-1
• Finally Potential Recovery will be sum of expected values of each problem (P1-P4)
• Potential Recovery without considering CAI (f) Competence Adherence Index for function & MI (f)
Maturity Index for function is Sum (P1-P4) which is 2,250,000
• PMO ROI: (Recovery – COST)/COST
• Assuming investment in PMO is 2 Million, then ROI: 2,250,000-2,000,000/2,000,000 =
250,000/2,000,000 = 12.5%

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• Now this needs to be validate w.r.t competence levels and maturity level to PMO to addressing these
issues and yielding the potential ROI as stated above.
• For this, each selection function CAI-F (Competence Adherence Index) and the MI Maturity Index,
needs to be identified.
• Based on this reassessment on addressing the problem for each function will be calculated: CAI (f)
* MI (f) * % Potential Addressing the Problem.
• Then, sum the Potential Recovery-2 (which includes CAI (f) & MI (f) factors into consideration.
• Finally Revised PMO ROI including CAI (f) & MI (f) factors will be calculated as (Potential Recovery 2
(including CAI and MI) – COST)/COST
• In below table, ROI-2 is Negative -44%, this lower than ROI-1 without CAI and MI factor. It means
that current PMO competency and maturity level is not up to mark to address the problem effectively
and yielding in negative ROI. Therefore 2 options:
• Option1: Need to Improve the CAI and MI of PMO
• Option2: Look for other functions which can be included to improve the CAI, MI as well addressing
problem with better ROI. E.g. selecting F2 function in below table.

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Conclusion:

• Calculating the ROI of a PMO is a challenge, especially when using traditional models, which
do not consider the variability of the PMO phenomenon.
• The basic premise is that PMOs exist to reduce the losses observed in an organization's
portfolio.
• Each service/function has a probability of contributing to the recovery of portfolio losses.
• In each organization, different reasons can cause losses in the portfolio.
• The PMO VALUE RING methodology uses the experience of the community of PMO
professionals to estimate the potential for loss recovery from the reported problems and
functions offered by the PMO.
• The recovery potential is directly influenced by the maturity of each PMO function and the
level of competency with which each function is offered.
• ROI model is based on assumptions which needs to be validate during time.
• No fixed model as there is several functions with specific processes, benefits and
competencies involved in it.
• Losses can have multiple reasons, eg mis management, wrong estimation, not managing the
risks properly or suppliers not managed properly.
• To calculate PMO ROI, we need Portfolio Budget, % estimate loss and PMO Cost (investment)
• Need to consider the CAI (Competency Adherence Indicator) and Maturity Indicator of
respective functions to get accurate % probability of recovering the losses to get Final
Recovery.
• ROI of PMO-1 = (Recovery Cost (Without CAI & Maturity Indicator of Fx) – Investment Cost of
PMO/Investment Cost of PMO
• ROI of PMO-2 = (Recovery Cost (w.r.t CAI & Maturity Indicator of Fx) – Investment Cost of
PMO/Investment Cost of PMO.
• Hence ROI of PMO-2 is more accurate than ROI of PMO-1 as it considers accuracy of the CAI and
Maturity index of that function.

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• PMO ROI can be improved by or Incase of Negative ROI it means need to take actions to justify
the PMO and value delivery. Improving ROI by:
• Improving the competency of PMO team members
• Improving maturity of the PMO functions & processes or
• Reduce the cost of PMO
• Focus on Strategic Approach on Business of organization.

12. Topic-8: Establishing PMO Balance Score Card:

Conclusion:

• Monitoring the strategic project portfolio is a function, not necessarily a purpose.

• Monitoring the PMO strategically is tracking how it has been generating value for the
organization.
• In this case, the concept of Value is much broader than just a financial approach.
• Several factors will influence the strategic performance of the PMO and, consequently, its
ability to generate value and be recognized.
• Concept of Balance Score Card is also applied to the PMO, however the “Customers” are replaced
by “Stakeholders” & “Finance” with “Value”
• Step 5 (Competency), CAI & Step 6 (Maturity), MI of the PMO is the directly linked with “Growth
and Learning” investment done to improve the PMO Processes
• Step 3 PMO Processes defined for each selected function and Step 4 Performance Monitoring
KPI for those process within the functions performing results in improving the Overall PMO
processes and meeting Stakeholders Expectations and delivering defined goals.
• Step 1 Stakeholders Expectations and Step 2 PMO Functions Balance Mixed (EAI & BAI) helps
is identifying proper functions yielding benefits and meeting stakeholder expectations and
finally adding overall value to the PMO
• Step 7 PMO ROI providing the overall value delivery to PMO. However, 2 External Indicators can
also be used as:
• Organizational PM (Project Management) Maturity → Checking how the PMO is adding
value to improve the PM Maturity level in Organization.
• Stakeholders Perceptions → Approaching Stakeholders to evaluate their perception of
PMO whether adding value to Organization. This is “Overall Perception of Value”
• The PMO VALUE RING methodology offers a Strategic dashboard for the PMO, with performance
indicators:
• PMO Maturity Indicator - PMO (MI)
• PMO Competency Adherence Indicator - PMO (CAI)
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• Performance indicators for each PMO Function - PMO Functions (KPI’s)
• Indicator of adherence to the expectations of Stakeholders – Stakeholders Expectations
Adherence Indicator (EAI)
• PMO Function Mix Balancing Indicator – PMO Function Mix Balance Indicator (BAI)
• Competency Development Plan Monitoring
• Monitoring of the Action Plan for the evolution of the PMO
• PMO ROI Indicator

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13. Summary:
• Focus as per organization needs what is required NOT the predefined models as organization-to-
organization requirements are different.
• Step-1: Identify the expectations of the stakeholders (however this should be aligned with the
current challenges within the organization to address the problems) if not then this will lead to
misalignment within the organization and desire results will not come!

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• Step-2: Create mixed of PMO functions based on EAI and BAI to address the stakeholder’s
expectations. To define best PMO Balanced mixed of functions along with yielding benefits meeting
stakeholder’s expectations.
• Step-3: Define PMO processes for each selected functions to align with Stakeholders
expectations.
• Step-4: Defining PMO KPI’s for each process within the functions to monitor whether PMO is
performance as per expectations or not.
• Step-5: Defining the PMO team members based on their competencies and HC requirement to
each function and make an action plan in case of gap in the competency levels (1 - 4 levels)
• Step-6: Assess the Current PMO Maturity and Define Target Maturity and make an action plan to
achieve the same in next 12 months.
• Step-7: Defining the PMO ROI to indicate whether going in right direction or not. Incase of Negative
ROI it means need to take actions to justify the PMO and value delivery. Improving ROI by improving
the competency and maturity of the PMO or Reduce the cost of PMO OR focus on Strategic Approach
on Business of organization.
• Step-8: Create PMO Balance Score Card for Monitoring. Value of the PMO can be access through
“External Indicators” as well Organization PM maturity and Stakeholders Perception..

• Usually this cycle Step-1 to Step-8 in annual. It may change as per the change in strategic direction
of the management.
• “Internal Goals” relevant for PMO Team and “External Goals” are relevant for PMO Stakeholders.
• Generating Value could be time frame: “Short Time”, “Medium Time” & “Long Time”.
• PMO Stakeholders: Executives, Top Management, Project Managers, Project Team and Functional
Managers
• PMO Functions: 26
• Expected Benefits: 30

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• Functions Categories: 3 (Strategic/Tactical/Operational),
• PMO Competencies:10 (Ability to Influence, Ability to Integrate, Client Focus, Conflict Management,
Effective Communication, Interpersonal Relationship, Proactivity, Knowledge Management,
Process Management and Project Management)
• Competency/Maturity Levels: 4
• Each PMO function may require different competencies with different relevance, however it is not
necessary that all competencies are applicable for respective PMO function.
• Indicators: EAI/BAI/CAI/MI/Function Performance Indicator
• To improve the Target Maturity of PMO function need to address action plan on Process/Technology
and People.
• Variation in the % relevance in the indicators due to different stakeholders’ perception influence .
• Target and Desired Maturity level is the “Level of Sophistically” desire to achieve that function
objective.
• While collecting the stakeholder’s benefits expectations, we must classify with different level of
relevance within the classified group of stakeholders.
• PMO will be recognize when the expected benefits are yield which stakeholders are looking for.
• PMO Maturity will occur when PMO becomes Sophisticated in these 3 areas Strategic / Tactical
/ Operational.
• PMO Stakeholders expectations basis for PMO will be setup to yield those benefits.
• PMO Functions are defined based on Stakeholders Benefits Expectations delivery.
• The best practice is to use two to four performance indicators per function during each
evaluation cycle. This ensures that the evaluation is comprehensive enough to provide valuable
insights without creating unnecessary bureaucracy or excessive control, which can hinder flexibility
and innovation. Focusing on 2-4 indicators, PMOs can achieve a manageable level of control without
overwhelming the team with too much data or analysis.
• Different groups of evaluators to carry out the competency assessment of the PMO members
because different groups may have different relevancies in the assessment of the professional.
• The PMO TUNE model encourages PMOs to reflect fundamentally on the importance of value
generation planning in the time dimension so that its clients can effectively - and constantly - realize
the PMO's contributions and the benefits generated from its work.
• Generating value for the organization is the GREATEST Challenge of PMO in PMO Value Ring
Methodology.
• Function Objective: Each function should have its purpose clearly described, establishing the
scope that will be met and, if applicable, the limits that exist in the provision of this service. Within
the previous context, what are we talking about? Functions details (Objectives/Flow Chart, Tools,
Techniques/Responsibilities/Metrics) are part of Service Catalogue. This also includes PMO process
guide for that function.

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• Function Flowchart: Each function should have a flowchart, demonstrating the activities required
to provide the service and the flow of information, defining inputs and outputs, as well as the
techniques and tools used. Within the previous context, what are we talking about?
• PMO Process Guide: provides recommended specifications for each function (the processes in the
database); and can be used as a reference to create the PMO service catalogue. In other words, if
there is an interest in starting a new service in a PMO, it is necessary to use the recommendations
provided by the PMO PROCESS GUIDE as a starting point, making the necessary adjustments in
all suggested items, in order to adapt the process to the reality of the PMO. Eventual changes to
the service should always be incorporated into the catalogue, maintaining strict version control of
this document.
• Perceived value balance indicator: Balance indicator of giving value of the PMO in the short,
medium and long term, Ensure Value delivery over Time.
• One of the success factors of a PMO: Ability to Readapt and Reconfigure.

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