Building the Project Management Offices (PMOs) of the Future

A New Challenge for all Language Service Providers

It was over twenty years ago when I made my first significant career change, from working as a Quality Manager in a manufacturing company, to managing a Business Unit in a Language Service Provider (LSP) company. With this switch, I had moved from a world, full of structure, processes, Japanese manufacturing principles and what used to be called Total Quality Management. This new world was unstructured, wild-west-like and almost everyone I met had a strong view that “Quality” only referred to translation quality. It was a world of high velocity, complex projects and global markets that needed to be managed. There was an ongoing need for new talent, with the skills to fill a range of emerging roles, including Project Management, and it was clear to me that Project Management, as a key service that all LSP’s sell, needed much more quality management.

The Changing Nature of Project Management

When any business unit leader takes control over a new portfolio of projects, or a group of clients, they will quickly learn that their success is dependent on the Project Managers who work in their group. The translation industry has many roles, e.g. Translator, Engineer, Business Development Manager etc., all of which contribute to the success of any customer engagement, but none more so than the humble Project Manager. 

Good Project Managers make the difference between a successful project and a failed one. They “Actively Manage” their projects to ensure that the LSP in which they work can develop a reputation for consistently delivering for their customers. Growing revenue from customer accounts is particularly dependent on good project management as their consistently excellent work invariably gets rewarded by the customer awarding more business to the company. 

Good Project Managers make the difference between a successful project and a failed one.

It has long been the established conventional wisdom that Project Managers are responsible for the classic ownership triangle consisting of: TimeCost and Quality. In my experience, from building and managing PMO teams all over the world for over twenty years, I would also suggest a fourth element, i.e. People. This fourth element has emerged strongly in the last number of years, as the industry has evolved. As companies try to “Do More With Less” and “Increase Operating Leverage” the net result is that everyone is much busier, and this has a particularly profound effect on the Project Manager. In many companies the Project Manager has now taken on the additional responsibilities of an Account Manager. They very often have revenue goals to worry about, on top of managing the deliveries. Some have even morphed into Customer Success Managers, partly due to the fact that modern Language Service Providers also provide Software to their customers and so on-boarding and maintenance have become part of the engagement. Whatever their title is, from one company to the next, what has now become normal is that Project Management is as much about managing People, including stakeholders such as customers, colleagues, team-members, suppliers etc., as it is about focusing on Time, Cost or Quality. 

The competences, which are now required to be a good People Manager, are often very different from what was once expected to be in the ideal profile for a Project Manager. The result is that people who used to be a perfect fit for Project Management, are sometimes no longer a good fit. Often they have to find a company that still works in a way where they can feel at home. Perhaps they may leave the profession and sometimes even the industry. Hiring new project managers is now much harder, as finding people with the right blend of competence, personality and experience is a more difficult task. Millennials are not as attracted to the role, as their predecessors once were, due to the excessive workload, long hours, sometimes insane levels of pressure, and a lack of professional development opportunities. All service industries, including the Language Services industry, are now experiencing a global shortage of good Project Managers. Companies are competing aggressively for each other’s resources in a talent war, similar to the one which exists in the Software industry, where companies constantly struggle to recruit good Developers. 

Hiring new project managers is now much harder, as finding people with the right blend of competence, personality and experience is a more difficult task.

The Future

So, if these last few paragraphs show us what happened in the past and what the present looks like, then what does the future hold for those tasked with building and growing the PMOs of the future? According to the Project Management Institute’s recent publication, entitled: “Project Management Job Growth and Talent Gap 2017-2027”, there is a worrying trend in the shortage of project management talent, which will continue to grow over the next 9-10 years. The authors claim that “Across the globe, there is a widening gap between employers’ need for skilled project management workers and the availability of professionals to fill those roles”. It goes on to claim that the expected growth, between now and 2027, in project management-oriented jobs will be as follows:

What is clear from this data, is that the current skills shortage in the Project Management universe is not going to get better anytime soon. Following this logic, we can also expect that, as the talent gap widens, the cost of hiring Project Managers will go up and up. One of the most difficult aspects about managing a PMO is that the internal fixed-cost of Project Management is rarely exceeded, or even matched, by the revenue that is directly derived from this vital service. This has always been the case in competitive service industries and it forces many companies to try to automate the role of the Project Manager, or at least some of the more administrative elements of the role. This places an additional development burden on the company and often has very mixed results in terms of delivering any actual savings, in real Project Management costs. Many companies simply move their Project Management roles to low cost locations but not all companies have the luxury of being able to set up offices in strategic cost-effective locations and have no choice but to continue to hire as they have always done.

The salary costs of Project Managers clearly varies from one location to the next but when a company decides to hire they also incur costs such as job posting, recruitment, on-boarding, benefits, equipment, management, HR, IT etc. This burdening can add as much as between 85% and 120% to the actual base salary, depending on the company, to give the true cost of employing an additional person. As this talent gap widens, the problem will become unsustainable for companies who are already struggling to maintain, or improve, tight operating margins in competitive and often commoditised industries.

One of the key ingredients in the PMO of the future will be a new blended approach, with some of the internal fixed-costs of full-time Project Managers being combined with external variable-costs from outsourcing Project Management as a Service. This does not mean simply hiring contractors to act as Project Managers, as they usually have a very high loading percentage, as well, mainly due to being onsite. Also, in many countries, authorities are more focused on the use of contractors and recently, in the landmark decision of Dynamex Operations West, Inc. v. Superior Court of Los Angeles, No. S222732 (Cal. Sup. Ct. Apr. 30, 2018), the California Supreme Court unanimously announced a new test for determining whether a worker is an employee or an independent contractor. This will have profound implications on Service Industries and, in particular, on the Language Services Industry, as the reliance on contractors has grown exponentially in recent years.

One of the key ingredients in the PMO of the future will be a new blended approach, with some of the internal fixed-costs of full-time Project Managers being combined with external variable-costs from outsourcing Project Management as a Service.

Bringing all of this together, it is clear that the industry already suffers from talent shortages. These shortages will also get worse as time goes on, right across the world. The cost of Project Management will therefore continue to rise, against a backdrop of pricing pressure in most service industries. The PMO of the future will need to be staffed by people who have the right blend of competences to handle both the task-oriented and people-oriented elements of modern project management. The PMO will have to be global, with cultural integrity, serving customers in their own languages and time zones, to maximise differentiation and service. The service delivered by the PMO will need to be quality-managed, to ensure that it is fit for purpose and that it is delivering the expected value. Finally, the PMO of the future will have to embrace at least some outsourcing, but this should only be to experienced, secure, specialist partners who have a proven track record and a strong core-competence in building global PMOs.

How We Can Help

XTENSOS operates an Outsourced PMO Service for companies, including specifically Language Service Providers. Our multilingual Project Managers can conduct business in several languages including English, French (both for Canada and France), German and a number of other European languages (including several Nordic languages). Once we are engaged by a company, our Project Managers become a seamless extension of the Customers’ own Project Management Office, but the service comes at a fraction of the cost that the Customer would incur in hiring people directly. 

We offer in-time-zone support for the United States, all of Europe and we have a significant overlap window for Asia every day. In addition, given our European locations, our Project Managers are very close to our Customers’ main supply chains, making it much easier to manage deliverables each day. Our dedicated teams are segregated to ensure that information security is maintained at all times.

Our leadership team has over 30 years of combined LSP experience and our team members are recruited and selected based on our XTENSOS Competence Framework, which has been built with all of our years of PMO management experience in the industry. The competences are combined with our specific approach to in-depth Behavioural Profiling, to ensure that each Project Manager is a good fit for both the industry and for specific Customer assignments. 

At XTENSOS, our core values are Humility, Integrity, People and Service. We try to live by these values, in everything that we do, and we bring these values to our Customers in all of our services, including the Outsourced PMO Service. To find out more about this, and the other services, which we offer directly to Language Service Providers, please get in touch with us on LinkedIn or Xtensos.com.