Dry, very technical, how ever, an engaging speaker, Ricardo Vargas, with lots of knowledge and surviving the middle east (Iran and Afghanistan).

Taking us through a 10 step process how to measure an d calculate the Return of Investment of a Project Management Office across a Portfolio of Projects.

Look up all his details, slides and templates at www.rvarf.as/roi.

1. Create Portfolio of Projects by putting the following elements in a table: ID, Project, Duration, Budget, Area, Risk, Complexity and may more if you want to :-)
2. Calculate the financial return of projects in portfolio, by using the AHP ‘Analytical Hierarchy Process and looking at the simple calculation ‘Investment’ - ‘Benefit’ = ‘ROI’
3. Categorize the Projects and add the categories to Portfolio
4. Determine (Optimistic / Most Likely / Pessimistic) Profile on Complexity (With PMO vs. Without PMO)
5. Simulate Portfolio of Projects by applying the ‘Monte Carlo Analysis’ - this is where I got lost :-)
6. Identify Gains obtained
7. Calculate Investment an Opperational Costs of PMO
8. Determine Influence of PMO for and on the Results
9. Calculate  the ROI of the Project Management Office
10. Analyze the Final Results

Good, this was complicated. The management I have been exposed to over the last 24 years in various organizations and industries would have kicked me out, how ever, if they want numbers, this is a process to get to numbers. Whether they are right or wrong is up to the simulation and the parameters and Mind-Set you apply to it :-) Have a go and give it a try.

And of course, please find below the reflection (Sort of shows what I got out of it …. text …. text …. text ….)

Cornelius Fichter, The Host of the PMpodcast, is chairing the 2008 PMO Summit in Coconut Grove Florida.
As the chair he was asked to open the summit with a short keynote (Good on you, Cornelius), and he decided on the theme “The Value of PMOs”. To get an understanding about the perception out there he asked his audience to participate in a survey and to complete 5 questions.

Here is the survey and my answers.

1) Where do you think that PMOs provide the most value?
In Portfolio mgmt, Project tracking & status reporting, General PM support & training, Improved resource mgmt, Improved scope mgmt, Knowledge leverage & re usage, Projects finish on time, Reduced delivery cost, Proactive issue & risk mgmt, Company wide PM standardisation

For me its the following:
Provides Most Value - in General PM support & training
Provides Second Most Value - in for Project tracking & status reporting
Provides Third Most Value - in for Company wide PM standardisation

2) Is the value of your PMO understood by senior management?
There was the answer options “yes”, “no”, “the Company does not have a PMO”, “Other”
Everybody needs to answer that based on her / his specific situation.

3) What do you see as the latest PMO trends? (For instance a specific type of software, a management concept or PMO certification. I’d like to learn what you see at the horizon for us.)
My Answer: The trend we have seen in the past is from centralisation to decentralisation. I f a PMO is becoming to big (number of resources), strong facilitator of a specific method and stage gates etc. and is being perceived as a bottle neck for companies innovation, flexibility and time to market it will be decentralised. After some time, new PMOs show up in the company, different shapes of specific project methods get developed and worst case different Tools to support the method. The key question is, whether a PMO is an admin function (resource Facilitation & Training, Project Method & Tools provisioning) or whether it has the operational responsibility to deliver a project (profit & loss) because than governance including health checks, status reporting, Quality Management procedures and a flexible standardised approach plays a much bigger role.

4) What makes a PMO successful in it’s day to day operations?
My Answer: Effective support in benefit realisation to the business by supporting the well skilled selected PMs to apply a flexible method, supported by an easy to use Tool. Its not about strict rules and guidelines. Its about flexible application of these to be able to realise business benefits in time to market.

5) Do you have any further comments in regards to PMOs or this quick survey?
My Answer: Enjoy your keynote and the conference. Looking forward to a podcast on that experience and the lessons learnt from that conference including some new trends in that space.

It will be interesting what Cornelius is coming back with.
What are the new trends? I havent seen many new things in that space. Prince 2 is getting stronger here in Australia and PMI/PMBOK have to suffer a little bit from the Governance call to support Prince2 (The Government see it as the silver bullet

Another question would be, what happens to PMOs and PM in the current market climate (Recession or here in Australia the D-Word which means deficit)?
Are project methods been reassessed and made smaller and more effective?
Does the project register (that any PMO should have) becomes great value for transparency, re-prioritisation and re-assessment of particular projects?
Are PMs layed off?
Are PMOs decentralised and the PMs moved back into the business?

What is happening out there (Remember, we are on an island here, a BIG island, but still an island) !

Cornelius, we are looking for the answers!

Looking back in my career I have seen many concepts how PMOs have been established in organisations. Most of them started in IT and for whatever reason remain there and managed not just IT Streams of Projects but Enterprise Projects in behalf of the Business as there was a Project Method, skilled resources following the method and even a solution in place to support project management processes and providing transparency as required. I have seen far less PMOs on an enterprise level. 

Now I came across an article from CIO.com that the MGM Mirage is about to Transform its IT Project Management Office into an Enterprise Project Management Office. 

What are they key reasons highlighted in the article

• The discipline and transparency imposed by a project management office (PMO) can benefit the entire company, not just IT
• more effective than departmental PMOs because they’re more likely to earn executive support and because projects approved through an enterprise PMO are more likely to be aligned with corporate strategy and business goals.

How is it been done

• to have all projects and portfolios “of a certain significance or certain amount of capital” funneled through the enterprise PMO
• several functions outside IT will be piloted in the enterprise PMO
• provide transparency across portfolio to get buy in from other functions and entities