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Organizations need to develop more efficient ways to manage their projects as the number of simultaneous project rises continuously. Setting up a PMO is one of the common solutions to deal with a great number of projects. But these entities do not have outcomes which can directly be measured. Thus, PMOs can be considered as an unnecessary cost item. Although the strategic importance of project management is known, it is still necessary to evaluate the contribution of PMOs. Although PMO is a hot topic in project management discipline, there is no commonly accepted model to evaluate the contribution of PMOs (Mariusz, 2014; Paulo, 2012; Pellegrinelli & Garagna, 2009; Reina, Cetani, Lacroce, & Ventura, 2012; Singh, Keil, & Kasi, 2009; The Center for Business Practices, 2008).
The iron triangle cost, quality, and time are “traditional” performance criteria for project management (Toor & Ogunlana, 2010). Inevitably, all projects are evaluated with the classical project performance criteria. But these criteria are suitable in project execution phase. When the project is finalized, these criteria lose their importance and satisfactions of stakeholders become more crucial (Baccarini, 1999). In contrast, projects can be considered as breaks of a building. They are not very valuable if they are not in the same line with organizational objectives. Thus, organizations also need to appraise their project outcomes with criteria such as customer loyalty, profitability, market share increase, and sales target. In other words, organizations need to be sure that their stakeholders are satisfied with organizational outcomes to survive. When it is considered at operational level, project outcomes must keep stakeholders happy by creating innovations (Bryde & Robinson, 2005; Jugdev, Mathur, & Fung, 2006; Lim & Mohamed, 1999; Muller & Turner, 2007). Therefore, in this study, instead of studying classical project performance criteria; satisfactions of stakeholders are preferred as an outcome, and it is measured with four variables. These are “satisfaction of project stuff” (S1), “satisfaction of project owners” (S2), “satisfaction of upper management” (S3), and “increase in innovativeness” (S4).
The main objective of this paper is to investigate the contribution of PMOs to their organizations. With the guidance of existing literature, it can be said that there are two groups of PMO activities. The first group of activities directly affect the satisfaction of stakeholders. The second group of activities support the first group. In other words, these activities have indirect effect on the satisfaction of stakeholders. Thus, the first purpose of this research is empirically explore the PMO activities which directly affect the satisfaction of stakeholders. The second purpose is to investigate the relationship between PMO activities.
In literature, researchers have developed different approaches; they have investigated and categorized PMO activities in many different ways. In this research, PMO activities basically split into six groups. Four of these groups which are “procurement management”, “communication”, “project planning & follow up” and “project team management” are proposed to have direct effect on stakeholder satisfaction. The remaining two “knowledge management” and “IT infrastructure” are proposed to have indirect effect through “project planning & follow up”.
The next section introduces related literature under theoretical background heading. The research design and survey results, discussions are presented in the following sections. The final section explains the implication of this study and proposes further research directions.