Project Management Offices (PMO) in Australia Survey 2017 Key Takeaway In the Age of the Customer, the expectation that a customer gets what they need when they need it, has been influenced by Digital Disruption and Big Data trends. To address the challenge of keeping up with disruption, organisations need to develop a strategy to embrace risk and create an agile environment and data driven culture. The development of these strategies is changing the way Enterprise, Portfolio, Program and Project Management Offices need to operate to be successful. Why read this report? Escient has undertaken a PMO survey to capture how organisations across Australia and spanning various industries operate today. How organisations deal with change in a Project Centric environment and respond to disruption is what we can help you address. The Standish CHAOS Report 2015 shows that, in general, project success rates remain low but that the adoption of Agile methodologies and principles can have a dramatic, positive effect on the chances of your project being a success. While Agile methodologies are increasingly prevalent, many PMOs remain predominantly focussed on waterfall-based methodologies. In this, the first Escient survey of PMOs in Australia, we present findings on the state of PMOs in Australia, their exposure to Agile methodologies, their style and the toolsets they employed. In summary, we have found that the common challenges for PMOs across Australia are: Quality of project delivery throughout the organisation Accurate and timely resource and financial information Reporting quality Aligning projects to organisational strategy More details on these challenges are outlined in the PMO Challenges and Analysis and Conclusion sections of this survey.
Summary of Responses The survey drew a good range of responses across geographic locations and industries. While the majority of responses came from states in which Escient is based (NSW, South Australia and Victoria), some were also received from Queensland and the ACT. Percentages of responses from each state were as follows: New South Wales 62% Australian Capital Territory 7% Victoria 16% South Australia 13% Queensland 2% No responses were received from states or territories not listed. PMO Geographic Locations QLD SA Vic NSW ACT Figure 1. PMO Geographic Locations Responses were received from PMOs based in 15 different industries. The main industry represented was Finance & Financial Services (approx. 25% of responses) followed by Telecommunications, Technology, Internet & Electronics (16%) and Education (13%). Figure 2. PMO Industries Finance & Financial Services Healthcare & Pharmaceuticals Construction, Machinery, and Homes Utilities, Energy, and Extraction Real estate Insurance Agriculture Non-profit Manufacturing Entertainment & Leisure PMO Industries Telecommunications, Technology, Internet Education Government (state) Government (federal) PMO Industries Automotive 0% 10% 20% 30% Percentage of Respondents Copyright Escient 2017. All Rights Reserved. ABN 20 613 555 810 1
Percentage of Respondents ESCIENT PMO AUSTRALIA SURVEY 2017 PMO Type and Style PMO Type The survey asked respondents to identify the type of PMO their responses were relevant to. Results showed that the majority of PMOs were setup as Portfolio PMOs i.e. the majority of PMOs are not operating across the entire enterprise level set of an organisation s projects. 50% 40% 30% 20% 10% PMO Types The type of PMO plays an influencing role in a number of other attributes the style of PMO, functions and toolset employed. 0% Program Portfolio Enterprise Portfolio Figure 3. PMO Types PMO Style The survey asked respondents to identify the style of PMO currently employed. There was an almost even spread amongst the 3 types of PMO styles from the responses. The differing nature of what are commonly referred to as the main three styles of PMO are summarised below. 35% PMO Styles 30% Supportive Directive Controlling 35% Figure 4. PMO Styles Style 1: Supportive PMO The Supportive PMO generally provides support in the form of on-demand expertise, templates and guidelines but largely relies on personnel within different business units to use these supporting artefacts and manage the projects themselves. Overall approximately one third of all respondents classed their PMO as supportive. However, Program PMOs were more likely to be either controlling or directive. Only 25% of Program PMOs were classed as supportive. Organsation s General Executive Business Unit 1 PMO PM Business Unit 2 Templates and tools PMO is a generator and provider of information, templates and tools to project managers within the organisations various departments. PM Business Unit 3 PM Business Unit 4 PM Figure 5. Supportive PMO Illustration Copyright Escient 2017. All Rights Reserved. ABN 20 613 555 810 2
Style 2: Controlling PMO In addition to providing support, controlling PMOs monitor adherance to guidelines and templates to some degree. This will usually be in the form of regular status reports and performance of gate-based, and possibly ad-hoc, project reviews. Th is is usually in the form of quality assurance reviews of project deliverables to ensure adherence to prescribed methodology. 36% of respondents classed their PMO as controlling in style. Organsation s General Executive PMO Business Unit 1 PM Regular / gate reviews Information exchange now two ways. PMO is also a quality reviewer of projects. Business Unit 2 PM Business Unit 3 Templates and tools PMO is a generator and provider of information, templates and tools to project managers within the organisations various departments. PM Business Unit 4 PM Figure 6. Controlling PMO Illustration Style 3: Directive PMO Moving beyond the project assurance function seen in a controlling PMO, the Directive PMO takes more direct responsibility for delivering projects with Project Managers reporting directly to the PMO. 33% of respondents classed their PMO as directive in style. PMO Organsation s General Executive Business Unit 1 PM PM PM PM Centralising project delivery Responsibility for project delivery is centralised and managed through the PMO. Project Managers are no longer scattered throughout different departments but report directly into the PMO. PMO still creates tools and templates and performs gate reviews but now has direct control over project resources. Business Unit 2 Business Unit 3 Business Unit 4 Figure 7. Directive PMO Illustration Copyright Escient 2017. All Rights Reserved. ABN 20 613 555 810 3
% of Respondents % of Respondents Percentage of PMOs ESCIENT PMO AUSTRALIA SURVEY 2017 PMO Size The size in terms of FTEs employed by PMOs represented a relatively smooth bell curve against the range of options available in the survey. Subsequent sections of this survey provide charts showing correlations between the number of Full-Time Equivalent people (FTEs) staffing a PMO and factors such as the type, style, scope, functions offered, and size of the organisation. PMO Size (Number of FTEs) 35% 30% 25% 20% 15% 10% 5% 0% 1 2-3 4-5 6-10 Over 10 Number of FTEs within the PMO Figure 8. PMO Size (Number of FTEs) Number of Projects At an overall level the number of projects within scope of the PMOs for respondents can be represented as follows: 30% PMO Size (Number of Projects) 25% 20% 15% 10% 5% 0% 1-10 11-20 21-40 41-60 Over 60 Number of Concurrent Projects Figure 9. PMO Size (Number of Projects) The number of PMOs supporting smaller sets of projects is bolstered by the incidence of Program PMOs. A look at the number of projects for Program PMOs vs Enterprise/Portfolio PMOs shows a distribution as follows: PMO Size (Program vs. Portfolio) 20% 15% 10% 5% 0% 1-10 11-20 21-40 41-60 Over 60 Number of Projects Portfolio/Enterprise Program Figure 10. PMO Size (Number of Projects) Program PMOs vs Other As would be expected, Program PMOs generally have a smaller number of projects (1-20) than PMOs supporting an entire enterprise or a portfolio/department within an enterprise. Taking a weighted average from the range of PMO staff sizes and crossreferencing it to the number of projects each PMO covered (and excluding Copyright Escient 2017. All Rights Reserved. ABN 20 613 555 810 4
% of Respondents Range of PMO Sizes (FTE count) ESCIENT PMO AUSTRALIA SURVEY 2017 Program PMOs), yielded a correlation between PMO staff and scope of projects as follows: 14 12 10 8 6 4 2 0 Figure 11. PMO Size based on Number of Projects (average number of concurrent projects) The vertical bars represent the range of PMO staff numbers for each PMO Size (in terms of number of projects). The red markers indicate the weighted average. Clearly, as expected, there is some correlation between the number of projects a PMO covers and the number of staff required. To summarise in tabular format: Number of Projects PMO Size based on number of projects 1-10 11-20 21-40 41-60 Over 60 PMO Staff (number of FTEs employed) Average Low High 1-10 3.4 1 6-10 11-20 3.9 2-3 4-5 21-40 5.3 2-3 Over 10 41-60 6.8 2-3 Over 10 Over 60 7.6 2-3 Over 10 Table 1: PMO Size (FTEs vs number of projects) PMO Size (excluding based Program on Number PMOs) of Projects Number of Projects While the averages show a good trend line, there are outliers within each range, reflecting the range of functions provided by the PMO. In terms of annual spend on projects within scope of PMOs, the distribution was skewed towards the higher end of the response values provided: 50% Annual $ Spend on Projects 40% 30% 20% 10% 0% $0 to $1m $1m to $5m $5m to $15m $15m to $50m Over $50m Average Annual $ Spend on Projects Figure 12. Annual $ Spend on Projects This pattern existed for both Program PMOs as well as Portfolio and Enterprise PMOs. For future surveys, Escient will provide a wider range of values within this category to determine a more granular statistical breakdown. Copyright Escient 2017. All Rights Reserved. ABN 20 613 555 810 5
Number of PMOs Range of PMO Sizes (FTE count) ESCIENT PMO AUSTRALIA SURVEY 2017 14 12 10 8 6 4 2 0 PMO PMO Size Size based on Value of Projects (excluding Program PMOs) (Annual $ Spend) $0 to $1m $1m to $5m $5m to $15m $15m to $50m Over $50m Value of Projects Figure 13. PMO Size based on Value of Projects (Annual $ Spend) Some anomalous responses for very small value portfolios aside, a similar pattern is evident correlating the number of PMO staff to the value of the project portfolio under the scope of the PMO. PMO Size vs. Style Interestingly the choice of PMO style did not seem to play a large role in influencing the number of PMO staff required. PMO Size by style PMO Size by Style 6 5 4 3 2 1 0 1 2-3 4-5 6-10 Over 10 PMO Size (Number of FTEs) Directive Controlling Supportive Figure 14. PMO Size by Style The weighted average number of FTEs for each PMO style remained roughly equal. This was also true when looking at only PMOs of a certain size (e.g. over $50m project portfolio). Copyright Escient 2017. All Rights Reserved. ABN 20 613 555 810 6
Number of PMOs ESCIENT PMO AUSTRALIA SURVEY 2017 PMO Size vs. Functions Several other correlations were evident as influencing the number of PMO FTEs required. Escient view the range of functions PMOs could offer as a series of tiers of service as follows: Escient Tiered PMO Service Offering Tier 1 (top level) services include portfolio management, alignment of the project portfolio to strategic objectives and portfolio optimisation Tier 2 services include some higher level PMO functions such as benefits management and master scheduling Tier 3 are basic services most PMOs will offer Figure 15. Escient PMO Tiered Service Offering As would be expected, PMOs performing higher level functions tended to require more FTEs than lower level PMOs. As can be seen from this chart, PMOs reporting to offer a Benefits Management function reported having 4-5 FTEs at a minimum clearly a different distribution than the general population of respondents. PMOs supporting Supporting Benefits Management PMOs with Benefits Management All PMOs 15 10 5 0 1 2-3 4-5 6-10 Over 10 PMO Size (Number of FTEs) Figure 16. PMOs Supporting Benefits Management Note: This data does not necessarily imply that Benefits Management need necessarily be a resource intensive PMO function. While time should be spent setting up benefits management correctly, a PMO can often then enforce and maintain good benefits management practices with minimal effort. Copyright Escient 2017. All Rights Reserved. ABN 20 613 555 810 7
PMO Size vs. Toolset The overall weighted average PMO size across all PMOs surveyed was approximately 5.5 FTEs. Indications are that the number of FTEs for PMOs using higher end toolsets were, in general, slightly higher than those using only lower end tools such as Microsoft Excel and SharePoint. Toolset PMO Staff (number of FTEs employed) Average Low High All PMOs 5.5 1 Over 10 Project Server 5.0 1 Over 10 Clarity 6.5 1 Over 10 Primavera Over 10 Over 10 Over 10 Table 2: PMO Size vs. Toolset While higher end tools can reduce manual effort to some extent, those PMOs using such tools are generally also performing more functions and higher end functions which explains the slight increase in FTE requirements. Interestingly for PMOs using Project Server there was, if anything, an evident drop in the number of FTEs required. While other advanced toolsets such as Clarity and Primavera tended to support higher end functions and be used by larger PMOs. Other influencing factors No statistically significant correlations were evident between methodology and PMO sizes. Copyright Escient 2017. All Rights Reserved. ABN 20 613 555 810 8
Project Methodologies Despite 29% of respondents reporting a predominantly waterfall-based project portfolio, the majority of PMOs supported project sets that were either mainly Agile (9% of respondents) or a mixture (51%) of Agile and waterfall projects. In other words, the majority of PMOs had at least some Agile projects within their realm of operation. PMOs Support for Different Methodologies Agile, 9% Mixed Portfolio, 52% Waterfall, 28% Hybrid/Custom Methodology, 11% Figure 17. PMOs Support for Different Methodologies While this is the first Escient PMO survey, our impression from the results and client conversations is that we would and will continue to see a trend towards more Agile and mixed portfolios. As such, more and more PMOs are facing the nuances required of providing traditional PMO functions for Agile-based projects. Interestingly, adapting to changing project methodologies was not listed as a key challenge facing most PMOs at present. Refer to the PMO Challenges section later in the report for more details. Although a small sample set, there were no obvious differences between PMOs supporting Agile projects vs. those purely waterfall-based, other than perhaps a slightly higher incidence of JIRA as a tool within the PMO toolset of Agile PMOs. Many still employed Microsoft Project, SharePoint, Project Server and Microsoft Excel within their toolset and there were no obvious differences in terms of PMO size or function to be seen between the two groups. Copyright Escient 2017. All Rights Reserved. ABN 20 613 555 810 9
% of Respondents ESCIENT PMO AUSTRALIA SURVEY 2017 PMO Toolsets We continue to see a wide variation in the extent and type of toolsets employed by PMOs to deliver their services. The versatility and ease of use of Microsoft Excel will likely see it remain a key tool of any PMO for the near future. 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% PMO PMOs Toolsets PMO Tools Figure 18. PMO Toolsets In terms of the number of tools reported as key for the PMO: 30% of respondents used only one or two tools 28% used a suite of three tools 30% used four tools 12% used five or more tools For those that used four or more tools, SharePoint was always one of these tools and Microsoft Excel almost always another. Escient hold no affiliation with a particular toolset vendor and view toolset requirements as just part of the overall solution to each particular organisation s PMO needs. Each organisation is unique and toolsets must be right-sized for the environment in which each PMO operates. Breaking the responses down further showed that smaller and Supportive style PMOs were more likely to rely on basic toolsets. While larger PMOs and those offering a more comprehensive range of services were more likely to have moved to Microsoft Project Server, Primavera or another extended toolset. Copyright Escient 2017. All Rights Reserved. ABN 20 613 555 810 10
PMO Functions Immediately clear from the response data is the vast range and variability of functions on offer from PMOs, regardless of size, style or type. As described earlier in this report, we have generally broken PMO functions into three distinct sets which we call service tiers. Prevalence of provision of each function within each service tier across the entire respondent population is provided below: PMO Functions (by Tier) Tier 1 42% Tier 2 49% Tier 3 68% Figure 19. PMO Functions Tier 1 (Top Tier) PMO Functions Comparatively fewer PMOs provided what Escient would class as the Tier 1 style PMO functions such as: Portfolio analysis and portfolio management (59%) Project assurance type functions (54%) Consolidated online dashboards (46%) Overall average rate of supply of these functions was 42% for functions categorised as Tier 1 in the above chart. Tier 2 (Middle Tier) PMO Functions Just less than 50% of PMOs provide functions we would class as Tier 2 services such as: Some form of resource / demand management (67%) Some form of master scheduling (57%) and dependency management (54%) Overall average rate of supply of these functions was 49% for functions categorised as Tier 2 in the above chart. Tier 3 (Lower Tier) PMO Functions Most PMOs offer the following range of core functions. These are what at Escient we would class as Tier 3 PMO service offerings: Consolidated reporting (91%) Governance / committee support (83%) Basic risk and issue management (70%) Copyright Escient 2017. All Rights Reserved. ABN 20 613 555 810 11
Overall average rate of supply of these functions was 69% for functions categorised as Tier 3 in the above chart. PMO Functions by Style In general, there was little correlation between PMO style or type versus function however supportive style PMOs typically offer a more limited range of services. Compared to the overall population, rate of PMO functions in each tier from Supportive style PMOs were as follows: PMO Services Tier Rate of provision of PMO functions All PMOs Supportive PMOs Tier 1 42% 32% (down 10%) Tier 2 49% 37% (down 12%) Tier 3 69% 56% (down 13%) Overall 54% 42% (down 12%) Table 3: Supportive style PMO Functions Interestingly there is still a large variation in the spectrum of functions being offered by more controlling and directive style PMOs. This is perhaps reflective of differing levels of organisational project delivery maturity and could also reflect differing interpretations as to what constitutes (effective) delivery of these PMO functions. Copyright Escient 2017. All Rights Reserved. ABN 20 613 555 810 12
PMO Challenges In alignment with Escient observations within the industry, quality of project delivery through the organisation remains one of the key challenges for PMOs across all regions and industries. Given this, it is interesting that Training and Mentoring did not feature higher in the list of PMO functions being offered (ranked 17 out of the 20 functions selectable in the survey). The ranking of other challenges amongst PMOs were as follows: PMO Challenges PMO Challenges Obtaining accurate and timely financial information 49% 31% 20% Reporting quality: projects, PMO & stakeholders 47% 36% 17% Quality of project delivery throughout the organisation 44% 44% 12% Aligning projects to organisational strategy 44% 36% 20% Obtaining accurate and timely resource forecasting 42% 44% 14% Quality or number of PMO resources 33% 33% 34% Implementing benefit management principles 29% 42% 29% Perception that PMO is too bureaucratic 24% 27% 49% PMO Branding/Visibility within the organisation 18% 47% 35% Lack of buy-in / interest from stakeholders 18% 44% 38% Toolset or challenges implementing EPM tools 16% 36% 48% Adapting to changing project methodologies 13% 29% 58% Challenges changing PMO styles 11% 36% 53% 0% 20% 40% 60% 80% 100% High Medium Low Figure 20. PMO Challenges It would appear from the results that there are three major sets of challenges. Challenge Set 1 A clear group of high-priority challenges exists. This group consists of challenges that over 40% of respondents ranked as high priorities and over 80% rating as high or medium. These challenges being: Obtaining accurate and timely financial information Reporting quality: projects, PMO & stakeholders Quality of project delivery throughout the organisation Aligning projects to organisational strategy Obtaining accurate and timely resource forecasting Copyright Escient 2017. All Rights Reserved. ABN 20 613 555 810 13
Challenge Set 2 A second, smaller group of challenges are those which around 20% to 40% of respondents ranked as high priorities. These being: Quality or number of PMO resources Implementing benefit management principles Perception that PMO is too bureaucratic Lower priority challenges Remaining challenges were ranked as lower priority where less than 20% of respondents ranked the challenge as a high priority. These being: PMO Branding/Visibility within the organisation Lack of buy-in / interest from stakeholders Toolset or challenges implementing EPM tools Adapting to changing project methodologies Challenges changing PMO styles Escient observations in the field are that this and some of the other lower ranked challenges may be under-reported or under-prioritised. A potential follow-up survey of stakeholders (senior executives) who rely on the PMOs for decision making purposes may yield an interesting contrast in results. Analysis and Conclusions Based on this survey, discussions with practitioners within the industry and expertise from a range of consultants, we see the following as some of the most common pitfalls at present for PMOs across Australia. Quality of project delivery Widely reported anecdotally, and rated as either a high (44%) or medium (44%) challenge by survey respondents, is the quality of project management / delivery within their organisations. Yet only 43% of PMOs offered training and mentoring services within their organisation. Escient specialise in project services particularly PMO and Project Management Services and are well placed to offer training services to provide project delivery capability uplift as well as to provide PMOs with the techniques, tools and templates required to maintain project delivery quality. We operate across a broad spectrum of industries and for organisations and projects of any size or methodology. Our consultants can perform project health checks, advise, assist or even step in to rescue and manage projects facing seemingly intractable roadblocks or challenges. Accurate and timely resource and financial information Despite a proliferation of tools, the ability to access accurate and timely resource and financial information on projects remains a key issue for all PMOs. At Escient, we recognise the complexity of these challenges and that provision of a toolset is only part of the solution. Our consultants have worked with a breadth of companies implementing innovative solutions, often with minimal toolsets to address these challenges. Copyright Escient 2017. All Rights Reserved. ABN 20 613 555 810 14
Reporting quality The quality of reporting to the PMO, and by the PMO, are another prevalent issue within the industry. We recognise that different organisations have differing needs at differing levels as far as reporting is required to underpin decision-making. Escient have a library of reports that we can leverage to help any organisation tailor and uplift its reporting capabilities across the board, without needing a toolset uplift. Aligning projects to organisational strategy While doing things right (project delivery) is near the top of the list of challenges, ensuring the organisation is doing the right things is also an enduring challenge. Tools such as MS Project Server offer sophisticated portfolio optimisation components, alignment to organisational strategy need not always involve overengineering. However, such toolsets are not a prerequisite to the performance of these functions. Some simple, practical solutions to measuring benefits and monitoring their release through project delivery can be an enormously valuable practice. Both for the organisation as a whole but also for the PMO to demonstrate value. As well as Project and Program Management Services, Escient offer advice and expertise in Portfolio Management functions and capability uplift in these areas. This includes the nuances of adoption of these practices in an Agile project environment for public and private sector organisations of all sizes in a range of industries. Whilst ranked as lesser priority challenges by those that work in, the perception that the PMO is too bureaucratic (24%) and PMO Branding/Visibility (18%) may be more evident issues if the survey were instead targeted at those that work outside the PMOs. Conclusion As part of a PMO Capability Maturity Review, Escient offer PMO review services that analyse an organisation s existing project delivery methodologies, organisational context, portfolio size and required PMO functions, and advise on the right size PMO for your organisation. Implementing or uplifting a PMO requires much more than selecting the right toolset and methodology documentation. To get value out of your PMO, it is imperative that any uplift or implementation includes appropriate training, stakeholder management and change management as part of the implementation methodology. Depending on the portfolio size, Escient generally recommend a pilot project or group of projects as proof of concept before broader roll out, and have consultants with extensive experience in implementing and uplifting all types of PMOs in a wide range of industries. Copyright Escient 2017. All Rights Reserved. ABN 20 613 555 810 15
Acknowledgements This survey was written in June 2017 by: Matt Robinson Principal Consultant Level 17, 40 Mount Street, North Sydney, 2060 M: 0459 323 746 E: matt.robinson@escient.com.au Matt is a senior project professional with over 20 years of projects experience. He has extensive delivery experience, experience leading and developing teams of project resources as well as experience in Project Assurance, PMO setup, uplift and ongoing management and development. Escient will continue to conduct PMO surveys on a regular basis over coming years to provide more statistical evidence of trends. Escient consultants, expert in PMO services, are available to any organisation for reviews of existing PMO practices, to assist in setup of new PMOs, and provide uplift in capabilities. We are also planning to perform surveys of PMO stakeholders i.e. the senior managers who rely on PMO services and Project Managers who fall under a PMO to round out our industry analysis. Escient wish to thank all participants who took part in our first PMOs in Australia survey with around 50 responses received. Escient intend to conduct such surveys on an annual basis going forward, with an increased number and breadth of responses and repeat responses to show trends in the Australian PMO marketplace. About Escient Escient is an employee-owned digital and business advisory firm that helps clients define and achieve their strategic goals. We use a next generation consulting model based on shared success with clients and staff. Escient delivers client outcomes drawing on competencies in strategy, business case and requirements development, enterprise & solution architecture, program & project management, PMO services, change management and benefits realisation. Feedback or questions in relation to this survey or specifically regarding Escient PMO services can be addressed to pmo@escient.com.au For all other enquiries, please contact one of our offices at the following locations: Corporate Offices Sydney Level 17, 40 Mount Street North Sydney NSW 2060 Melbourne Level 8 South, 350 Collins Street Melbourne, VIC 3000 Adelaide Level 5, 121 King William Street Adelaide, SA 5000 You can also connect with Escient via the following social media domains: Copyright Escient 2017. All Rights Reserved. ABN 20 613 555 810 16