The relationship between project management office maturity and organisational project management maturity: An empirical study of the South African government infrastructure departments

http://dx.doi.org/10.7166/26-3-1021 THE RELATIONSHIP BETWEEN PROJECT MANAGEMENT OFFICE MATURITY AND ORGANISATIONAL PROJECT MANAGEMENT MATURITY: AN EMPIRICAL STUDY OF THE SOUTH AFRICAN GOVERNMENT INFRASTRUCTURE DEPARTMENTS L.S. Khalema 1, C.C. van Waveren2 & K.-Y. Chan3* Department of Engineering and Technology Management Graduate School of Technology Management University of Pretoria, South Africa 1 , , ABSTRACT The Project Management Office (PMO) has been associated with organisational project management competence. However, there is a lack of empirical evidence to support this perception. This study examines the relationship of PMO maturity and the nine knowledge areas that describe Organisational Project Management (OPM) by collecting data from 129 PMO executives, staff, and project managers in South African Government Infrastructure Departments (SAGID) using a structured questionnaire. The results show that a PMO’s ‘strategic’ maturity has the highest impact on all nine areas of OPM. It is thus recommended that public organisations need to accelerate the strategic maturity of their PMOs to benefit from them. OPSOMMING Die projekbestuurkantoor word met organisatoriese projekbestuurbevoegdheid assosieer. Daar is egter min empiriese bewysstukke om hierdie persepsie te regverdig. Die verwantskap tussen die projekbestuurkantoor volwassenheid en die nege kundigheidsareas wat organisatoriese projekbestuur volgens die Project Management Institute (PMI) beskryf, word ondersoek deur inligting van 129 projekbestuurkantoor uitvoerende beamptes, personeel en projekbestuurders in die Suid-Afrikaanse Regering se Infrastruktuur Departemente te versamel met ‘n gestruktureerde vraelys. Die resultate wys daarop dat die projekbestuurkantoor se strategiese volwassenheid die grootste invloed op al nege die kundigheidsareas het. Dit word dus aanbeveel dat publieke organisasies die strategiese volwassenheid van hul projekbestuurkantore versnel om sodoende die meeste baat daarby te vind. 1 * The author was enrolled and completed MSc (Project Management) degree in the Graduate School of Technology Management, University of Pretoria. Corresponding author South African Journal of Industrial Engineering November 2015 Vol 26(3) pp 12-26 1 INTRODUCTION The creation of a Project Management Office (PMO) by many organisations is still obscured by doubt and suspicion, and its value is questioned. It has been proved that establishing or having a PMO in an organisational structure is not an instant solution to project management challenges [1]. Rather, it is PMO maturity that adds value to Organisational Project Management (OPM). CPB Research found that, as the maturity of PMOs increases, so too do organisational performance and project delivery success rates [1]. The recent study of ESI International [2] emphasises the significance of the subject: “The discourse is shifting from determining PMO maturity to the value the maturing PMO brings”. So the value of the maturing PMO has still to be empirically tested, and the PMO’s maturity is to be correlated with either OPM maturity or project performance. The latter has already been carried out in detail [1,3]; but a direct correlation with OPM maturity is lacking. The reality is that most PMOs or corporations do not have a benchmarking measure and strategy that is aligned with developing and advancing OPM maturity [4]. The current research and literature is focused on the functions and value of PMOs in private sector corporations, and most of the studies have focused on the USA and Europe [1,2]. Public-sector projects face many more challenges than do private-sector projects, such as multiple stakeholders’ involvement, managing an environment of constant change, and coping with constraints that include a political system, organisational stovepipes, and limited resources [5]. Moreover, the strategic objectives of the public sectors are expressed not in terms of profit but rather in terms of user satisfaction and value for a wide range of stakeholders (including politicians); so it is difficult to observe the relationship between project management implementation and Return on Investment (ROI), which is a measure often used by the private sector [6]. Due to these changing dynamics of the environment, project management is essential for helping public organisations to run projects successfully. Formal project management practices in South African public organisations are still in the development phase, while most organisations have a low maturity level [7]. Many of the project management concepts are not well formalised and/or standardised, the cost-benefit results are questioned, and there is no general consensus about the role of project management in many matrix-structured organisations [8]. Research into PMO and its influence on OPM and project performance in South Africa is limited in general. Although studies have been done in the IT industry [8], almost none have been done in the public sector, which spends billions of Rands on construction and engineering projects. So this study will close the gap in the literature, and examine the relationship between PMO maturity and OPM competence using empirical data. The objective of this study is to establish the value that a mature PMO brings to an organisation, and whether the maturity of the PMO has any impact on OPM practice and competency. This study is undertaken for the South African Government Infrastructure Departments (SAGID) in the Gauteng Province, which is the economic heart of South Africa. In order to achieve the above objective, the research focuses on finding solutions to the following questions: 1. Which functions of the PMO are associated with Organisational Project Management (OPM) maturity? 2. Is there evidence that increasing PMO maturity increases the maturity of OPM? 2 THEORETICAL BACKGROUND The concept of a different structure being adopted by project-oriented organisations and being mandated to centralise and formalise project management processes for ‘organisation-projects’ strategic alignment and the successful delivery of projects is starting to impact on the South African organisational landscape. The degree of adoption varies depending on the industry; but there are no current studies that offer statistics for 13 South Africa that indicate which industry is leading in the use and adoption of PMOs. Many companies have adopted a PMO to attain project management supervision, control, monitoring, support, and alignment [9]; but the true benefits, or the inherent value, have been intangible. The value and benefits of the PMO have been scrutinised and have been the subject of recent academic papers and international research reports. These have included an examination of their corresponding influence on either organisational performance or project success rate (e.g. [6,10]). The correlative significance of these studies and of their conclusions has also been the subject of (...truncated)