Efficiency Analysis of Project Management Offices for Large-scale Information System Projects: Insights for Construction Megaprojects

Abstract

In this study, the efficiencies of Project Management Offices (PMOs) in large-scale information system (IS) projects are addressed by using data envelopment analysis. Moreover, the potential improvement levels for each input and output factors of inefficient PMOs are examined. The effects of performance levels of PMO functions on project outcomes with respect to efficiency levels are also analyzed. A total of forty-nine PMOs are analyzed for this study. The result shows that twenty-four PMOs are found to be efficient. As a result of analyzing the impact of efficiency on project performance depending on the functional levels of PMOs, those groups with a high degree of efficiency show higher outcomes compared with the groups with a low degree of efficiency regardless of the functional levels of PMOs. Furthermore, the gap in outcome between the groups with a high degree of efficiency and the groups with a low degree of efficiency is maintained at almost the same level, regardless of the functional levels of PMOs, with the exception of the case of practice management. This indicates that even those groups with a low degree of efficiency could expect high outcomes in terms of schedule and cost compliance if their level of practice management is high.

Critical Success Factors for Project Manufacturing Environments

“…The last factor in this category is the presence of a project management office (PMO), which consists of an organizational unit dedicated to providing support for projects carried out in the company through the organization of documents, allocation of resources, training, storage and provision of knowledge from lessons learned from previous projects, and the management and control of the projects. According to Ko et al (2015), PMO activities tend to increase organizational competence in project management and consequently improve performance.…”

The Effects of Maturity of Project Portfolio Management and Business Alignment on PMO Efficiency

“…The DMUs represent the organizational units to be evaluated, such as public institutions, schools, hospitals, and so on. In this study, PMOs correspond to decision-making units [16]. The DEA has various models according to the purposes of studies.…”

“…The CCR model is also called as the CRS model because it assumes constant returns to scale. Meanwhile, the BCC model is also called as the VRS model because it assumes variable returns to scale [16,18]. In the DEA, according to the characteristics of the DMUs to be analyzed and the purpose of the analysis, the CCR model and the BCC model are classified into the input-oriented model and the output-oriented model.…”

“…In general, the efficiency in input-oriented model can be improved by reducing the input value while keeping the output values constant. Meanwhile, in the case of output-oriented model, the efficiency can be enhanced as the output value increases while the input values remain constant [16]. Let us assume that the number of DMUs is K and, for each DMU k (k = 1, 2, 3, .…”

“…If the scale efficiency of k th DMU equals to 1, it means that it is efficient in scale, and if less than 1, it is considered as inefficient in scale. In cases where a DMU is not efficient from the scale point of view, the state of scale economy can be identified [16,19].…”