One Way PMOs Contribute To Your Company's Bottom Line

I was having a cup of tea/coffee with Renata Weir at Starbucks this morning. Renata asked me "Do you believe that PMOs contribute to a company's bottom line?". My answer was yes. I believe that PMOs contribute. Maybe not directly, but indirectly. Here is what I mean.

Most companies have a strategic plan. The intent of this plan is usually to take the company from the place where it is at today to a place where it should be. The reason for making this shift is fueled by senior management's desire to improve the company's profit. Be it by implementing processes that are less wasteful, adding a new product line to increase sales or take advantage of new market opportunities. And for each of these strategies we need a tactical implementation. This is where projects (and later PMOs) come into play:

Projects are a company's tactical tool to turn strategies into reality.

This means that for each strategy we will have a number of projects that need to be managed. Now... here is a rhetorical question for you: Do you think that senior management wants these projects to succeed or to fail? (I did say that it was a rhetorical question, didn't I?) OK, so yes, they want them to succeed in order to turn the strategy into reality.

The best way to give each project the best possible chance of succeeding is by using industry best pracitice approaches. We want to use appropriate project templates, project methodologies and project processes throughout our company. In other words: we need a corporate wide, standardized approach to managing projects in order to have all these strategic initiatives successfully implemented. And this is the kind of work that your PMO does. It defines a methodology to successfully bring strategic initiatives to a close and it measures the success.

That is why I said that a PMO indirectly contributes to a company's bottom line. PMOs don't make money as such, but they ensure that the projects we work on are successfully implemented, so that the company can take advantage of the anticipated, long term financial benefits.

What other areas do you see, where PMOs contribute to a company's bottom line? And are they all indirect ways or is there maybe a more direct way that they can contribute?