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:
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, 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.
Because 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.
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 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.
It was 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 these analysis were recorded in a benchmarking database that can be used to evaluate the PMO function balance.
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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