A Quick Guide to the Project Management Office (PMO)
Project portfolio management (PPM) helps organizations to deliver projects in line with agreed strategic business goals. It’s about the right projects at the right time. Of course, even when the best projects are selected, how can an organization ensure the work is completed to the desired standards? This responsibility often falls to the project management office (PMO).
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Read on to learn more about the PMO, including benefits, PMO frameworks, and introducing a PMO to your organization.
What is a Project Management Office?
A project management office refers to a group or department within a business responsible for defining and maintaining project management standards throughout the organization. The structure and size of project management offices vary from one organization to another according to business needs, available resources, and project management maturity.
PMOs are typically departmentally based with many organizations operating several PMOs.
PMO Responsibilities and Benefits
According to the Project Management Institute, PMOs completed an average of US$100 million worth of projects in 2012 and delivered around US$71 million in value through revenue increases and/or cost reductions.
In a more recent study, the PMI found 80% of organizations with a strong project management culture have an active PMO, with clear alignment to business strategy.
The primary function of the PMO is to create and distribute standardized processes and templates to project teams. These resources act as a single source of project truth, ensuring consistency, accountability, and quick project set-up.
When implemented and followed correctly, these guidelines increase success in a repeatable way for all projects, boosting organizational efficiency and agility. The PMO is also frequently responsible for documenting lessons learned at the end of a project, adding to the existing knowledge pool.
In addition, the PMO will likely oversee:
- Project and Program Delivery
- Portfolio Management
- Team management, training, and development
- Resource allocation and management
- Governance and performance management
- Change Management
- Strategic planning and alignment
- Reporting to senior management and stakeholders
- Organizational responses to new technologies and market changes.
5 Common PMO Frameworks
In 2013, the PMI conducted an extensive research project to establish common PMO frameworks and best practices to provide guidance to PMOs. The following five frameworks were identified.
1. Organizational Unit PMO/Business Unit PMO/Departmental PMO
This refers to a PMO created to support projects for a specific business unit or division. The PMO assists with establishing standard processes, training, resource management, governance, operational project support, and human resources utilization. This PMO may also collaborate with other PMOs within the organization as required.
2. Project-Specific PMO/Project Office/Program Office
In some cases, a large project or program requires their own PMO, which is temporary. Responsibilities include data management, coordination of governance and reporting, and administrative activities to support the project or program team.
3. Project Support/Services/Controls Office or PMO
The main purpose of this PMO is to provide training and resources to project managers. Project Supports PMOs are frequently implemented by organizations with low project management maturity.
4. Enterprise/Organization-wide/Strategic/Corporate/Portfolio/Global PMO
The Enterprise PMO is the highest-level PMO entity in an organization, often responsible for alignment of project work and corporate strategy. With influence over other lower-level PMOs, the EPMO plays a powerful role in effective project portfolio management, stakeholder engagement, and strategic planning.
5. Center of Excellence/Center of Competency
The Center of Excellence supports the execution of project work by equipping the organization with methodologies, standards, and tools to enable project managers to deliver projects.
The Center of Excellence increases the capability of the organization via best practices, training, mentoring and capability development, and knowledge management.
Of course, the type of PMO deployed for your organization must be appropriate to your strategic needs and culture. The structure of your PMO may combine various features from the above frameworks or take a completely different format.
5 Steps to Establishing a Successful PMO
All projects require a plan; establishing a PMO is no different! The phases, tasks, and project duration will depend on the type of PMO you wish to establish and project maturity levels. Below is an outline to help you get started.
1. PMO Assessment and Strategy
Begin by assessing the current status of project management and project portfolio management processes within your organization. It’s also important to consider how project management is perceived today to inform your approach to change management.
Next, define the desired future state, and any stakeholders who can help get you there.
Perform a gap analysis on current and future states to decide next steps. Based on the analysis, you may need to create a brief business case for review by senior management and stakeholders before proceeding to the next stage.
2. PMO Initiation
During the second stage, you will need to prepare a detailed business case outlining the scope and capability of the PMO, metrics for success, and a roadmap to achieve all desired functions. The document should identify goals, approaches, risks, and constraints associated with the roll-out of the PMO.
At this point, you should consider what software tools are needed, particularly for reporting to stakeholders. Many PMOs use simple tools such as Excel for tracking and reporting. However, as the PMO becomes more mature, the limitation of these tools will quickly become apparent.
Using a collaborative project management tool such as BrightWork facilitates a range of essential PMO activities including portfolio management and reporting, resource management, and issue and risk management.
The desired output of this stage is to secure funding to move forward.
3. PMO Establishment and Development
Time for the fun part! Establish a physical space for the PMO and get your staff, including PMO project managers, in place.
4. Staged Implementation
Begin transitioning projects into the PMO, providing support and training to project teams as needed. If any resistance occurs, draw upon your change management plan or ask your stakeholders for guidance.
5. PMO Continuous Improvement
Using agreed metrics and KPIs, track the effectiveness of the PMO and make changes as needed.
Editor’s Note: This post was originally published in July 2017 and has updated for freshness, accuracy, and comprehensiveness.