April 06 2023 at 04:00AM
Critical Success Factors for Project Management Office: an Insight from Indonesia
Some recent data from the Standish Group research outlines high failure rate of software development projects . Successful projects for the last 5 years take the success criteria as follows: on time, on budget, and with satisfactory results. The Standish Group also identifies the success rate of IT projects  as follows:
By: Teguh Raharjo, Betty Purwandari, Riri Satria, Iis Solichah1 I. INTRODUCTION Some recent data from the Standish Group research outlines high failure rate of software development projects . Successful projects for the last 5 years take the success criteria as follows: on time, on budget, and with satisfactory results. The Standish Group also identifies the success rate of IT projects  as follows: 39% of projects are success (on time, within budget, and in accordance with the features and functions needed). 43% of projects are challenged (finished behind the schedule, over budget, and the features and functionality does not meet with the users’ needs). 18% of projects are unsuccessful (canceled or project output is not used). Some surveys report an increase of project success rates from 2004 to 2012, caused by some factors. These are processes, methodologies, skills, cost, tools, decision-making, and optimization of internal and external factors . Project management factors greatly contribute to the success of the software development or IT projects . One way to implement project management methodologies in an organization is the implementation of the Project Management Office (PMO). Several studies show the failure of Project Management Office (PMO) execution: The implementation of PMO has a high failure rate, as reported by Gartner . Three (3) out of four (4) applications of the PMO failed in 3 years, as reported by Association for Project Management (APM) in the 2010 Project Management Institute (PMI) Global Congress . PMO in most enterprises failed to reduce their IT operating cost or to improve performance, as reported by the Hackett Group . There are 47% of respondents in a survey, which considers PMO implementation as an overhead cost. This was reported by the Project Management Solutions . A preliminary survey was conducted with respondents from Project Chapter Board at the PMI Indonesia. The survey shows that there is a high failure rate of PMO implementation in Indonesia. A respondent considers that there is 51% to 70% failure rate, while the rest three respondents consider that there is a 21% to 50% failure rate. The respondents were previous Chapter President and Vice Presidents of the PMI Indonesia. They have experiences as Head of PMO in various organizations. All respondents also support further research to identify and rank factors influencing success rate of PMO implementation in Indonesia. This study aims to contribute to the development of PMO in Indonesia. It examines factors that affect successful implementation of PMO in IT projects in Indonesia. Then these factors are ranked to help organizations prioritizing suitable solutions. Therefore, the research question of this study is: "What factors do mostly affect the success of PMO implementation of IT projects in Indonesia?" II. LITERATURE REVIEW A. Project Management Office (PMO) Project Management Institute (PMI) defines PMO as a unit of organization, which aims to make process standards, manage resources, methodologies, tools and techniques . PMO is responsible to provide support for project implementations. It is also known as Project Office (PO) and can be considered as a center of excellence of the organization. It is a unit supporting project managers to achieve project goals by providing standard processes and project management methodologies . The PMO terminology depends on the characteristics of the organization . There are some other terminologies e.g. portfolio level, or programs and projects . B. PMO Success Criteria The literature defines PMO success criteria as PMO Key Performance Indicator, PMO Metrics, or PMO Measurement. Relevant references were compiled to obtain a PMO success criteria list, which is summarized in Table I. Table I: The Compilation of PMO Success Criteria from Literature PMO Success Criteria References        Project success x x x x x x x Stakeholder satisfaction - - x x x x x Alignment with business objectives of the organisation - x - - x - - Output quality - - - x - - x PMO growth and performance x - - x - - x Stability and control of process - x - - - - x C. PMO Success Factors The literature defines PMO success factors as summarized in Table II. Several factors with similar characteristics were merged. It produces a list of PMO success factors as follow: Resource team, who has the knowledge and skills including the ability to provide added value to the organization. Support from the top-level management and stakeholders. The quality of leadership of the organization that has the PMO competence. Having a vision, mission, roadmap, standard process, role and responsibility, as well as a clear organizational structure. Table II: The Compilation of PMO Success Factors from Literature PMO Success Factors References      PMO resource team that has the knowledge and expertise x x - - x The support from the top level management x x x - - The quality of leadership of PMO organisation x x - - - The ability to provide added value to PMO x x - - - Alignment with company business goals - - x x - The clear and good roles and responsibilities - - x - - The facilities and adequate infrastructure - - x - - Having a clear roadmap - - - x - Having a standard process - x - x x Having a good organisation structure - - - - x The position of independent PMO - - - - x The purpose of establishing a clear PMO - - - - - D. Analytic Hierarchy Process (AHP) The Analytic Hierarchy Process (AHP) method developed by Dr. Thomas Saaty is a useful tool to provide solutions for decision making of either technical or managerial problems through weighting models. This method is a quantitative problem solving based on the analysis of a hierarchical model. To form the model, the AHP needs the human logical interpretation, experience, and knowledge . E. Thematic Analysis This study uses the thematic analysis method to conduct the qualitative analysis. Thematic analysis requires the involvement of more than one researcher, and it is a part of content analysis . Content analysis is suitable for analyzing text data, where the researchers analyze the data from documents, or interviews. III. METHODOLOGY A case study was conducted on the Project Management Institute (PMI) Indonesia. The PMI is the largest community of project management in the world, as it is in Indonesia. The majority of its members and administrators (Chapter Board) are Information Technology project managers. This study adopts the interpretative paradigm  while combining the qualitative and quantitative method [15, 16, 17]. The qualitative method is used to collect the data analyze them to produce a hierarchical structure called the AHP model. The primary data are collected through polling and survey, with some PMO project management experts at the PMI Indonesia as the participants. The survey is conducted by delivering the questionnaires to the participants face to face to obtain more accurate data. The secondary data i.e. information from the literature is also used in this study. The data is also analyzed quantitatively through pairwise comparison using the AHP method. There are previous studies on project management, which are also use the AHP method [18, 19, 19, 20, 21, 22]. Finally, the deductive method is used to draw conclusions. A. Expert Selection Table III shows the list of expert representatives based on the following criteria: Has a certified PMP (Project Management Professional) President or Vice President of the PMI Indonesia Chapter More than 10 years of experience in project management, preferably in the information technology field. Have some experiences in PMO in organization: (1) serve as a PMO role. (2) Developing a PMO system. (3) serve as a PMO Head in the organization. Table III: The Experts List Expert Code Respondent Code Title in PMI Indonesia Experience in PMO Experience in Project Management Expert 1 R5 Chapter President (at the pass) Head of PMO, Consultant > 20 years Expert 2 - Chapter President (at the pass) Head of PMO, Consultant, Regional Mentor PMI Asean > 20 years Expert 3 - Chapter President (at the pass) Consultant > 20 years Expert 4 R2 Chapter President (at the pass) Head of PMO, Regional Mentor PMI Asean > 20 years Expert 5 R4 Vice President Head of PMO > 20 years Expert 6 R3 Vice President Head of PM, run a PMO function > 20 years Expert 7 R1 Vice President Head of PM, run a PMO function > 20 years Expert 8 - Vice President (at the pass) Head of PMO > 20 years IV. THE RESULTS AND ANALYSIS This section discusses the results of the interview, the AHP calculation results, and the results analysis. A. Validation of PMO Success Criteria and Factors A list of success criteria and factors of the PMO is predetermined based on the literature review as explained in section 2. The list Likert scale is investigated through interviews with the respondents, as given in Table IV for the success criteria, and Table V for the success factors. All respondents agreed with the proposed criteria and factors. Therefore, all of them are further processed to produce the AHP model. Table IV: Likert Scale for the PMO Success Criteria PMO Success Criteria Likert Scale Value R1 R2 R3 R4 R5 Project success 5 5 5 5 5 Stakeholder satisfaction 5 5 5 5 5 Alignment with business objectives of the organisation 5 5 5 5 5 Output quality 5 5 5 5 5 PMO growth and performance 5 5 5 5 5 Stability and control of process 5 5 5 5 5 Table V: Likert Scale for the PMO Success Factors PMO Success Factors Likert Scale Value R1 R2 R3 R4 R5 The PMO resources team that has the knowledge and skills including the ability to provide added value to the organisation 5 5 5 5 5 Support from the top level management and stakeholders 5 5 5 5 5 The quality of leadership of the organisation that has the PMO competence 5 5 5 5 5 Having a vision, mission, roadmap, standard process, role and responsibility, as well as a clear organisational structure 5 5 5 5 5 B. The AHP Calculation The weights of the PMO success factors are obtained by applying each success factor to each criterion of the success criteria, to form a 4x6 matrix (4 factors and 6 criteria). This matrix is then multiplied by the 6x1 matrix i.e. the Eigen factors of each of the success criteria, to produce a 4x1 matrix i.e. the final weight of the success factors. The final weight of the PMO success criteria and factors are shown in Fig. 1. fig.1 Final Weights of the Success Criteria and Factors C. Qualitative Analysis Several initial interviews were administered before the respondents filled out the pairwise comparisons questionnaires. These were semi-structured interviews on the following topics: The PMO names in Indonesia The PMO scope in Indonesia The Level of PMO role in Indonesia The above list is consistent with the literature , to determine the PMO success criteria by name, scope and level of the PMO in the organization. 1) PMO Name in Indonesia Some discussion about the existing PMO names is also found in the literature . In this study, the respondents are asked to answer the following questions: "What are the PMO names in your organization or the organization where you involved in” and “What are the PMO names in Indonesia?". Table VI shows the collected PMO names. Table VI: PMO Names Respondent PMO Names R2 Project Services Unit Project and Risk Management Unit R4 Corporate Project Office (CPO), for example in the oil palm plantation organisation Portofolio of Office Project Support Office (PSO) R5 Project Management Office Portofolio Program Management Office (in the corporate level or above) Program or Project Management Office (in the managemerial level) R3 Project Management Project Management Office (PMO) 2) The PMO Scope in Indonesia The PMO scope includes portfolio, program, or project management office . The respondents of this study are asked to answer the following questions: "How is the PMO scope in Indonesia? Does it only handle projects, programs, or portfolios?” From the interviews, most of the respondents confirm that the PMO scope in Indonesia is only individual projects, while some suggest it is including the portfolio management office, program management office, and project management office itself. Similar information is also reported by research in the US, Canada, and Europe [24, 23]. 3) Characteristics of the PMO Success Criteria and Factors in Indonesia The initial interview indicates some characteristics of the PMO success criteria and factors as summarized in Table VII. Table VII: Characteristics of the PMO Success Criteria and Factors in Indonesia Respondent PMO Names in Indonesia R2 Project Services Unit Project and Risk Management Unit R4 Corporate Project Office (CPO), for example in the oil palm plantation organisation Portofolio of Office Project Support Office (PSO) R5 Project Management Office Portofolio Program Management Office (in the corporate level or above) Program or Project Management Office (in the managemerial level) R3 Project Management Project Management Office (PMO) D. Recommendation Some research methods are proposed to rank PMO success criteria and success factors topic. A quantitative approach on this topic could also be proposed to complement the qualitative one [24, 7]. However, for the qualitative approach, the future research could involve even more detailed PMO success criteria to focus on the IT area. The success factors should also be expanded to include some other factors e.g. the PMO functions in the organization, its maturity, its impact to the project success, and its supports to the business functions of the organization . Moreover, to conduct the weight calculation there were possible improvisation with the AHP: Combine the AHP with the Bernardo techniques . Combine the AHP with the fuzzy AHP and ANP . Integrate the AHP with the TOPSIS-Grey . Possible future research on this topic are suggested as follow: Defining a framework for PMO development [26, 27, 28]. PMO success factor adoption to support the organization’s strategy [26, 29]. V. CONCLUSION This study aims to answers the following research question: "What are the factors that mostly affect the success of the Project Management Office (PMO) for Information Technology projects in Indonesia?" The answers based on the results and analysis in section 3 are: The rank of success criteria (highest to lowest): Project success The alignment with the business objectives of the organization Stakeholder satisfaction PMO Growth and Performance Stability and control of process Output quality The rank of success factors (highest to lowest): Support from the top level management and stakeholders. Having a vision, mission, roadmap, standard process, role and responsibility, as well as a clear organizational structure. The quality of leadership of the organization that has the PMO competence. The PMO resources team that has the knowledge and skills including the ability to provide added value to the organization. The most significant success criteria suggested by the results of this study could help the IT projects in Indonesia to increase their probability of success. Based on the most significant success criteria, the IT projects should always keep their project success definition clear, make sure that the project is progressing in line with the organization’s business objectives, and not only focusing on the projects’ output quality. Moreover, based on the most significant success factors, the IT projects should not only focus on their project team, but also always putting the effort to gain the supports from the top level management and stakeholders. Based on qualitative analysis and results comparison with the literature, the result of this study is not only applicable for the PMO of Information Technology projects, but also for the PMO of all types of projects or industries in Indonesia. REFERENCES  S. Hastie and S. Wojewoda, "Standish Group 2015 Chaos Report - Q&A with Jennifer Lynch," https://www.infoq.com/articles/standish-chaos-2015, 2015.  The Standish Group, "Chaos Manifesto 2013. Chaos Manifesto 2013," The Standish Group, United State of America, 2013.  K. Crawford, The Strategic Project Office Second Edition, Boca Raton, Florida: Taylor and Francis Group., 2011.  D. Fitzgerald, "How to Avoid the 'Seven Deadly Sins' of a Level 2 PMO," Gartner Analysis. https://www.gartner.com/doc/2809617/avoid-seven-deadly-sins-level, 2014.  O. Schibi, "Why PMOs do not deliver to their potential. Originally published as a part of the 2013 PMI Global Congress Proceedings. New Orleans, Louisiana: Project Management Institue. http://www.pmi.org/learning/project-management-failure-to-deliver-5883," Project Management Institute, United Stated of America, 2013.  The Hackett Group, "The Hackett Group: Most Companies with Project Management Offices See Higher IT Costs, No Performance Improvements," http://www.thehackettgroup.com/about/research-alerts-press-releases/2012/11012012- research- details-factors-behind-failure-pmos.jsp, United State of America, 2012.  Project Management Solutions, "The State of the Project Management Office (PMO)," PM Solutions Research. http://www.pmsolutions.com/reports/State_of_the_PMO_2014_ Research_Report_FINAL.pdf, United State of America, 2014.  Project Management Institute, A Guide to the Project Management Body of Knowledge (PMBOK Guide), Pennsylvania, United States of America: Project Management Institute, Inc, 2013a.  J. K. Pinto, Project Management: Achieving Competitive Advantage, London: Pearson, 2010.  M. Aubry, Identifying the Forces Driving Frequent Change in PMOs., United State of America: Project Management Institute, 2011.  W. Karkukly, Managing the PMO Lifecycle A Step by step to PMO set-up, Build Out and Sustainability Second Edition, Canada: Friesen Press, 2015.  Saaty, T.L., & Vargas, L.G., Models, Methods, Concepts & Applications of the Analytic Hierarchy Process Second Edition, Springer, 2012.  D. Cooper and P. Schindler, Business Research Method Twelfth Edition, New York, United State of America: The McGraw-Hill/Irwin Series in Operations and Decision Sciences, 2014.  Sugiyono, Metode Penelitian Manajemen Pendekatan Kuantitatif Kualitatif Kombinasi Penelitian Tindakan dan Penelitian Evaluasi, Bandung, Indonesia: Penerbit Alfabeta, 2015.  F. D. Felice, "A multiple choice decision analysis: an integrated QFD – AHP model for the assessment of customer needs," MultiCraft International Journal of Engineering, Science and Technology Vol. 2, No. 9, 2010, pp. 25- 38. http://www.ajol.info/index.php/ijest/article/view/63849/51665, 2010.  N. Rahmani, "Developing a Multi Criteria Model for Stochastic IT Portfolio Selection by AHP Method," World Conference on Business, Economics and Management (BEM-2012), May 4–6 2012, Antalya, Turkey. Procedia - Social and Behavioral Sciences. Volume 62, 24 October 2012, Pages 1041–1045. http://www.sciencedirect.com/science/article/pii/S187704281203618X, 2012.  M. Grimaldi, "An AHP-based framework for selecting knowledge management tools to sustain innovation process," Knowledge and Process Management, Vol. 18, No. 1, pp. 45-55. https://www.researchgate.net, 2011.  P. Parthiban, "A Multi criteria decision making approach for suppliers selection," Procedia Engineering 38 (2012) 2312 – 2328. http://www.sciencedirect.com, 2012.  O. Vayvay, "ERP consultant selection problem using AHP, fuzzy AHP and ANP: A case study in Turkey," E3 Journal of Business Management and Economics Vol. 3(3). pp. 106-117. http://www.e3journals.org, 2012.  A. Vidal, "Measuring project complexity using the Analytic Hierarchy Process," International Journal of Project Management. Retrieved from www.sciencedirect.com, 2011.  F. Torfi, "Selection of Project Managers in Construction Firms Using Analytic Hierarchy Process (AHP) and Fuzzy Topsis," Journal of Construction in Developing Countries, Vol. 16(1), 69–89. Malaysia: Penerbit Universiti Sains Malaysia, 2011.  B. Oztaysi, "A decision model for information technology selection using AHP integrated TOPSIS-Grey: The case of content management systems," Knowledge-Based Systems 70 (2014) 44–54. http://www.elsevier.com/locate/knosys, 2014.  Project Management Institute, PMI’s Pulse of the Profession: PMO Frameworks, Pennsylvania, United State of America: Project Management Institute, Inc, 2013b.  B. Hobbs and M. Aubry, The Project Management Office (PMO) A Quest for Understanding, Pennsylvania, United State of America: Project Management Institute, Inc, 2010.  A. K. Haddadha, "Project selection by using AHP and Bernardo Techniques.," International Journal of Humanities and Applied Sciences (IJHAS) Vol. 5, No. 1, 2016 ISSN 2277 – 4386, 2016.  C. Verdun, "Success Factors for Creating a PMO Aligned with the Objectives and Organizational Strategy.," Research Gate Conference Paper. Retrieved from http://www.researchgate.net, 2010. S. Godbole, "PMO: Its Impact on Project Success and Measuring Its Performance," Proceedings of The 2014 IAJC/ISAM Joint International Conference, 2014.  H. Salameh, "A Framework to Establish a Project Management Office," European Journal of Business and Management. www.iiste.org, 2014.  Y. Bartens, S. d. Haes, Y. Lamoen, F. Schulte and S. Voss, "On the Way to a Minimum Baseline in IT Governance: Using Expert Views," 2015 48th Hawaii International Conference on System Sciences. Retrieved from http://ieeexplore.ieee.org/document/7070363/?arnumber=7070363&tag=1, 2015.  J. Brown, The Handbook of Program Management How to Facilitate Project Success with Optimal Program Management., New York: United Stated of America: McGraw-Hill, 2008.  G. Hill, The Complete Project Management Office Handbook Second Edition, New York, United State of America: Taylor & Francis Group, LLC, 2008.  G. Kendall, Advanced Project Portfolio Management and the PMO: Multiplying ROI at Warp Speed., Boca Raton, Florida, United State of America: International Institute for Learning, Inc. and J. Ross Publishing, Inc, 2003.  A. Patel, "Implementation Plan of PMO (Project Management Office) over EPMO (Enterprise Project Management Office) for Beneficiaries Success in Today’s Organizations," International Journal of Research in Management & Technology (IJRMT), ISSN: 2249-9563 Vol. 2, No.6, December 2012. http://www.iracst.org/, 2012.  P. Taylor, Leading successful PMOs: how to build the best project management office for your business, Farnham, United Kingdom: Gower Publishing Limited, 2011.  L. Tjahjana, The Program Management Office Advantage A Powerful and Centralized Way for Organizations to Manage Projects, New York, United State of America: American Management Association, 2009. 2018 Third International Conference on Informatics and Computing (ICIC) 1This article is a conference paper submitted for The 3rd International Conference on Informmatics and Computing (ICIC) 2018 and published on ResearchGate.