When a new IT project launches at Thomas and Adamson, a construction consulting firm based in London, the chief information officer (CIO) is not at the helm.

Instead, the early part of the project is handled by a team of specialist project managers, including technology, engineering, financial and legal experts.

This team works in a central project management office (PMO), and is responsible for all the firm’s new projects, handling everything from defining initial requirements to post-implementation audits.

The ultimate aim is to boost efficiency, cut costs and improve on project delivery, says Alastair Wallace, a project manager and partner with the company.

‘The PMO is a dedicated team of people who were brought in specifically because they have strong project skills, such as great leadership, good communication and the ability to quickly identify key drivers and business issues,’ he says.

‘They come from all kinds of backgrounds, but what they all have in common are those core skills.’

Having a dedicated team to manage IT projects that is not the IT department is an increasingly popular option. And little wonder, with project success rates apparently languishing in many organisations.

Metrics from research specialist Standish Group’s Chaos Report shows that IT project success in large organisations is well under 50 per cent, while other studies, such as those from consultant KPMG, estimate that fewer than 40 per cent of implemented projects, when measured one year later, showed their expected business value.

There are a number of reasons why project success in IT is so hard to come by.

First, new systems are often developed at breakneck speed, says Phil Everson, a partner in consulting with Deloitte.

‘There is enormous pressure, requirements change all the time, and you’re trying to do too many complex tasks in too short a period of time,’ he says.

On top of this, few IT departments have consistent project methodologies or ways of managing projects, says Everson.

‘Most IT departments resemble craft shops more than factories – there’s no consistent way of doing things,’ he says.

Everson says that a good PMO helps to drive commonality of approach across projects, effectively turning the IT craft shop into a factory.

‘Most IT projects fail because someone didn’t pay enough attention to users and their needs,’ he says. ‘A PMO avoids this by making every IT project a business project, with visible business sponsorship and good communication.’

Creating a PMO can give companies ready access to the project management skills that might not be available within the IT department, says Mark Blowers, a senior research analyst with Butler Group.

‘In IT, there has been an idea that people who want promotion should become project managers. But from a project perspective, that person might not actually be the best project manager,’ he says.

But it is important to realise that a PMO is not necessarily a shortcut to reduced IT spending. Research conducted by the Project Management Institute found that, in the first three years at least, PMOs tend not to generate lower costs.

However, most firms with a PMO say that the office has helped to improve overall project success rates, which in time generates savings by enabling better resource management and reducing failed projects.

‘We are seeing an increasing number of organisations deploying project management offices working out of or above the IT department,’ says Ian Finley, a research director with analyst AMR Research.

‘Companies are becoming frustrated by the challenges of actually getting IT projects to come in on time, on budget and delivering on their objectives; a PMO can help to keep those projects on track.’

Smart CIOs should be setting up their own PMOs – before the chief executive does it for them, says Finley.

‘Most PMOs are either run by the CIO or the chief operating officer (COO),’ he says. ‘So if you’re not the one running it you are going to find yourself sidelined, and the COO will be running your projects. In that scenario, you’re essentially the technology guy who keeps the lights on while the business strategy is handled elsewhere.’

So, what’s involved in creating a PMO? First, you need to decide whether your project management office will provide advice, or manpower. A PMO can act purely as an internal consultant; providing guidance and standardised best practice to managers across the organisation.

By having oversight of all projects and personnel, this kind of PMO can assign the best people to priority projects and keep their attention focused on that project.

Or the PMO can be a central resource, loaning out experienced project managers as required.

‘Generally, the second model requires a significant scale to work, but a PMO that provides structure and best practice can work in any organisation,’ says Finley.

Whichever model of PMO you opt for, it should be able to deliver the core functions of a project management team.

These include: project support; standardised processes and methodology; internal consulting and mentoring; access to project management technology and portfolio management.

It is important to allocate sufficient resources to a PMO – for example, the PMO at Thomas and Adamson employs 20 people out of a total of 120 employees.

‘We were also careful to bring in people with an understanding of all areas of the business, so there are lawyers, engineers, architects and IT people,’ says Wallace.

One of the biggest challenges that Thomas and Adamson faced with its PMO is dealing with the territorial instincts of internal and external clients working with the team.

‘Sometimes there is definitely a feeling that the PM people are treading on people’s toes,’ says Wallace.

‘There will always be people who say “this isn’t a project, it’s an IT project”, which is tough. But in the end it is about having people with the right leadership, communication and collaborative skills to work through that and bring the staff on board.’

Thomas and Adamson has also rolled out a project management application from Build Online, which allows the PMO to communicate with internal and external clients throughout the life of a project.

‘That level of communication is pretty hard to set up in the early days, but it was well worth all the hard work,’ says Wallace.

Such technology can save a PMO from reinventing the wheel, says Margo Visitacion, a vice president with Forrester Research. ‘Investing in a PM application will help to extend your methodology, because it will include robust methodology engines and workflow mapping,’ she says.

‘Software can also enable the PMO to anticipate potential constraints and act on them, instead of reacting to them.’

If you lack the resources or ability to create a PMO, software can help you to create a virtual PMO.

Alternatively, you might consider creating a smaller PMO in the IT department, says Blowers. Begin by bringing together experienced project managers to create a community that can share knowledge.

‘Organisations that have great project management have ways for project managers to share their experiences and ask for guidance,’ says Forrester’s Visitacion.

But she warns not to expect to build a complete PMO without a little help from outside. ‘My advice would be to get a finance person on the team, so you know the numbers add up,’ she says.

‘But the real value of a PMO is the consistency it brings.’