The board asks what £600k buys
A logistics company's CFO questions the £600k annual cost of a 9-person P3O. The company runs 30 change projects a year with £120m spend. Last year 9 projects were stopped late, 40% missed benefit targets, and the board saw only a monthly RAG pack. The P3O produces templates, schedules, reports and risk registers. The CFO says project managers should 'just do their jobs'. The CEO wants a decision next month on whether to keep, shrink or close the P3O. You are asked to build the value case, separate P3O value from line delivery work, and recommend what evidence should be produced over six months.
1. Identify the value drivers and baseline measures you would use to test whether the P3O is worth £600k. Avoid generic claims.
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Value drivers: better and faster investment decisions; earlier stop or redirect of failing projects; benefits realization; independent assurance; resource allocation; consistency and reduced duplication; regulatory compliance. Baseline measures: number and cost of late stops (9 last year), value of benefit shortfalls (40% of projects), decision lead time from proposal to portfolio board, reporting cycle time and effort, audit and assurance findings and closure rate, project manager time spent on P3O administration, duplication across templates and tools, and cost per project. Use financial values where finance can validate them, for example spend continued on projects stopped late. Do not claim a generic ROI. The £600k is the cost; the value case is the avoided losses and improved decisions, not the number of reports produced.
2. How would you separate P3O value from work that line project managers should do anyway?
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Separate delivery accountability from P3O services. Project managers own delivery, plans and benefits; the P3O enables decisions, provides standards, independent assurance and portfolio information. Template administration and time-sheet chasing are not P3O value if they can be automated or done by line managers. Ask which services change a decision or prevent a bad one; those are P3O. Reporting that nobody uses is waste. The P3O should be measured on decision outcomes and assurance actions, not on production volume. This distinction lets the CFO shrink the administrative tail without losing the decision-support core.
3. What recommendation would you make to the CEO, and what six-month evidence plan would support it?
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Recommend retaining but re-scoping the P3O for six months: shift capacity from template and report production to portfolio decision support, benefits assurance, stage-gate evidence and independent assurance. Set service levels and a published catalogue. Run a six-month evidence plan: baseline the metrics above, track decisions where P3O evidence changed a stop/go/redirect, quantify avoided spend with finance, measure decision latency and reporting effort, and survey project managers and board members. Report quarterly to the CEO and CFO. If the evidence does not show decision value, shrink to a small portfolio office or close. The recommendation is conditional, not a defence of the status quo.