Project Management Office
Annual Budgeting Process
Does your organization undertake projects that never seem to get completed, or worse, has too many projects with unclear priorities and conflicting schedules? Do your employees complain about ever-increasing workloads with little satisfaction gained from a finished job well done? It can be very frustrating to work in an environment where goals and objectives are never reached due to a constantly shifting landscape of projects and unfinished activities. Let us examine how we get into this situation and the best way to address it.
The budgeting process is usually the time to reach for management’s support of new projects. Each department is asked to prepare a budget for their respected area with funding for normal operations, but also for special projects that will improve overall operations, customer satisfaction, or some other worthwhile metric. Maybe the department has been looking at the project for some time and has a good idea of costs, time, and resources. Or maybe it is a wish that has suddenly caught the eye of a top executive, so the department takes a SWAG at the required resources. After the budgeting process, the organization has several funded projects in multiple disparate departments that need to be executed. I picture this as several runners at the starting line waiting to begin a race.
The projects begin in earnest with functional executive support for each and the appropriate level of governance. Naturally, the organization assigns internal department employees and external department resources to each project since none can be done without help from other areas of the company. Note: Typically, it is the best employees from each area that are assigned to these projects since each is strategic and important. The projects begin and this is where things start to go awry.
To set the stage, many strategic projects have just been approved and have kicked off. We will assume that all have project charters with a sound scope of work and adequate staffing, timelines, and funding. Now, in addition to the normal operations of each department, we are asking each area to provide expertise and service to numerous projects. Resources get stretched and the inevitable project issues arise that complicate the mix. Executives begin pushing for results, timelines get extended, additional funding is requested, and the organization starts looking for ways to cut corners and just get each of these projects DONE, as they become a drag on resources and funds.
Under this scenario, something is accomplished, but certainly not the desired end results. Each functional executive is dissatisfied with execution, employees are worn out from being overworked and frustrated, having provided a poor solution due to a lack of time. This can impact downstream job satisfaction by having to service a less than optimal solution going forward.
In addition, the organization’s infrastructure was not prepared for all the change this initiated and caused numerous uncoordinated secondary upgrade projects that were not anticipated.
WHAT HAPPENED?
Basically, the issue just described was the organization not evaluating and coordinating all the change initiated from each project. Each functional area is concerned about their own project, and no one is evaluating the impact on the organization. Executives are competing for scarce resources in hopes of starting as soon as possible to avoid funding shortfalls caused by project over-runs in other areas. All projects that exist in the different functional areas are completing for resources without an eye towards overall organizational impact.
THE PROJET MANAGEMENT OFFICE
All of this could have been avoided by gauging each of the projects for completeness (scope, timeline, resources, risk) and evaluating the return on each project. Then a coordinating body, with help from the finance organization, could layout a schedule for the execution of each project that fits in order of priority and with the organization’s annual business calendar…Avoiding large complex projects during the company’s busy season. This coordinating body is the Project Management Office (PMO).
In addition to working with the executive team to evaluate and coordinate all proposed projects, the PMO is also charged with monitoring current project execution and the movement of resources as needed to troubled projects. It also tries to minimize unplanned surprises to infrastructure and make sure that all business areas are considered.
Lastly, it works with each project area to focus on project execution and help the organization get better at project implementation. Evaluating what goes well and what could have been done better.
CONCLUSION
If your organization only undertakes one or two projects a year, then a PMO can be overkill. However, if your organization has multiple projects underway at the same time and little or no coordination between them, then a PMO could be the right solution to save money and improve outcomes.
There are many facets to establishing a PMO that will provide the right governance for your organization. If you are interested in finding out more, then please give me a call to discuss your current situation and how to proceed with setting up a PMO to fit your company culture.
