Debunking a PMO myth?

75% of PMOs are closed within three years of existence. This is one of the most widely known “facts” about PMOs and one that is shared frequently in PMO circles to scare one another. I have spent some time searching for the source of this particular piece of information, but drawn a blank. Here are some of the sources citing the number – or something comparable -, but unfortunately none of them refers to the source of the number:

“However, the evidence shows that these fail more often than succeed. In fact, the research indicated that over 75% of organizations that set up a PMO shut it down within 3 years because it didn’t demonstrate any added value” (Stanleigh, 2006)

“[…] with generally accepted industry studies and research from multiple sources citing that […] 75% of PMOs fail within three to four years” (Perry, 2013: xxii)

“[...] it is worth noting that over half the P3Os created are closed down within a five-year timeframe…" (Office of Government Commerce, 2013: 93)

A few cite vague sources or sources that I have been unable to find:

“50% of project management offices close within 3 years  (Association for Project Mgmt)” (source: https://www.keyedin.com/article/why-pmos-fail-5-shocking-pmo-statistics/)

“75% of PMO’s [sic!] fail within 3 years (Forrester)” (source: https://acuityppm.com/ppm-solutions/ppm-services/)

One promising lead I found is Schibi (2013), who cites the two Marks, Duddy and Perry.

“In fact, 3 out of 4 PMOs will close within 3 years (Duddy & Perry, 2010)” (Schibi, 2013)

The reference that Schibi cites is:

Duddy, M., & Perry, M.P. (2010). APM, Business Focused PMO Setup, PMI survey 2010

I have, however, not been able to find this article. In any case, as the quotation from Stanleigh above indicates, the number has been in existence at least since 2006, so the Duddy & Perry article is not the source of the original research.

Further investigation led me to Unger, Gemünde & Aubry (2012: 609), who state that ” PMOs have a low life expectancy of four years, on average” referring to research by Hobbs & Aubry (2007). Hobbs & Aubry’s study showed that PMOs are young with 54% of PMOs in their population having been created in the last two years. They attribute this to two factors: PMOs were being created at a high rate and were shut down or radically reconfigured at almost the same rate (Hobbs & Aubry, 2007: 79). On page 84 of the same article Hobbs & Aubry state “The data on the age of PMOs showed that PMOs are being shut down or radically restructured almost as fast as they are being created”, but this seems to be an extrapolation from the fact that PMOs are (or were in 2005) young.

Bredillet et al (2018) is another lead stating that “three-fourths of PMOs shut down in the first three years of their establishment” (Bredillet et al 2018:745). They attribute this piece of information to Singh et al (2009), but when I followed this lead I found the following: “Stanleigh (2006) asserts that ‘over 75% of organizations that set up a PMO shut it down within three years” (Singh et al., 2009: 411). So I was back right where I started!

It seems to me that we are confronted with one of those epistemological ghosts the characteristics of which it is that 1) they are surprising and 2) they are cited often enough to become a fact that nobody bothers to check anymore. Other examples include: “You can see the Great Wall of China from space” and “Chinese characters represent ideas, not sounds”. Or closer to the present domain: “According to The Standish Chaos reports [insert number of year desired]% of projects are challenged”. If we turn to some of the larger surveys of PMOs, one would certainly not expect that 75% of PMOs close within three years. The State of the PMO 2016 reports that 85% of the companies surveyed have PMOs in place and 30% of the respondents without a PMO were planning to set one up within a year. My personal experience from the PMO world is that there are far more companies setting up PMOs than companies choosing to close them down.

So I think we can safely dispense with the fear of PMOs being closed down at a rate as alarming as the above statements would have you believe.  

References:

Bredillet, C., Tywoniak, S., & Tootoonchy, M. (2018). Why and how do project management offices change? A structural analysis approach. International Journal of Project Management, 36(5), 744-761.

Hobbs, B., & Aubry, M. (2007). A multi-phase research program investigating project management offices (PMOs): the results of phase 1. Project Management Journal, 38(1), 74-86.

Office of Government Commerce. (2013). Portfolio, Programme and Project Offices: The Stationery Office.

Perry, M. P. (2013). Business Driven PMO Success Stories: Across Industries and Around the World: J. Ross Publishing.

Schibi, O. (2013). Why PMOs do not deliver to their potential. Paper presented at the PMI® Global Congress, New Orleans, LA. Newtown Square, PA. https://www.pmi.org/learning/library/project-management-failure-to-deliver-5883

Singh, R., Keil, M., & Kasi, V. (2009). Identifying and overcoming the challenges of implementing a project management office. European Journal of Information Systems, 18(5), 409-427.

Stanleigh, M. (2006). From crisis to control: New standards for project management. Ivey Business Journal, 70(4), 1-4.

Unger, B. N., Gemünden, H. G., & Aubry, M. (2012). The three roles of a project portfolio management office: Their impact on portfolio management execution and success. International Journal of Project Management, 30(5), 608-620.